PETALING JAYA (March 26): Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said today MAA has not planned for now to apply for the extension of the country's automotive sales tax exemption, which is seen as an incentive to spur car sales at a time when the industry is contending with the impact of the Covid-19 pandemic.
Aishah, however, said MAA will discuss the matter and try to apply for the extension of the automotive sales tax exemption later.
"As far as we know, the only thing that will spur the sales [of cars] is [for] car prices to come down, and it has to be incentives (such as the automotive sales tax exemption)," Aishah said at press conference here today after MAA's annual general meeting.
On Dec 29, 2020, news reports, quoting the the Ministry of Finance (MOF), said the MOF had announced then the extension of the vehicle sales tax exemption period by a further six months until June 30, 2021.
It was reported that the government had previously given a sales tax exemption on purchases of new vehicles for the period of June 15, 2020 to Dec 31, 2020.
It was reported that the MOF said in a statement the full sales tax exemption was implemented for locally assembled — also known as completely knocked-down (CKD) — passenger vehicles including multipurpose vehicles (MPVs) and sport utility vehicles (SUVs).
A 50% sales tax exemption is levied on completely built-up imported passenger cars, including new and used MPVs and SUVs, the MOF was quoted as saying.
It was reported then that Malaysia sales tax for vehicles was set at 10% for both locally assembled and imported cars.
"With the exemption, it means that the sales tax is fully waived for the purchases of locally assembled cars, while a 5% tax is imposed on imported cars," Bernama reported.
At the MAA press conference today, Aishah said MAA is maintaining its 2021 vehicle sales target of 570,000 units compared with the 529,324 recorded in 2020.
"This year (2021), we believe car sales will perform better in the first half compared with the second half because of the Penjana programme that will help boost (car) sales," she said.
According to Penjana's website, Penjana is a RM35 billion Malaysian government initiative to help the country's economy recover from the impact of the Covid-19 pandemic.
Aishah said besides the sales tax exemption, MAA's optimism about car sales volume growth in 2021 also stems from factors including lower interest rates for loans to buy cars and the introduction of new vehicle models to spur the automotive market.
"I have been told the March (2021) figure will be much better than February's as most of the Japanese car manufacturers' financial (year) ends fall in March, so they will push the (car sales) figure to get good results," she said.
On March 17, 2021, it was reported that Malaysia's vehicle sales volume rose 4.13% year-on-year to 42,784 units in February 2021 from 41,088 in February 2020, as traffic volume to showrooms showed much improvement after the lifting of the Covid-19-driven Movement Control Order in certain states.
It was reported the MAA said in a statement then that February 2021 sales volume was 30.32% higher than the 32,829 units registered in January 2021.