Malaysians have until Dec 31 to take advantage of the tax rebate on locally assembled cars under the National Economic Recovery Plan (Penjana), announced earlier this year.
The plan was designed to boost the economy and increase Malaysians’ buying power in the face of the Covid-19 pandemic.
Prime Minister Muhyiddin Yassin announced the waiving of sales tax on all locally assembled vehicles to help the automotive sector to recover better from the crisis.
“The government has agreed to exempt sales tax up to 100% for completely-knocked-down (CKD) passenger vehicles and 50% on completely-built-up (CBU) cars from June 15 to Dec 31, 2020.”
Perusahaan Otomobil Kedua Sdn Bhd (Perodua) was offering cash rebates of 3% to 6% in June and subsequently revised its prices, which are valid until Dec 31.
UMW Toyota also announced a revised price list that is valid until Dec 31.
Automotive portal Paultan.org said at the time that savings from the sales tax exemption could be observed on the company’s entire passenger car range. Only the price of the Innova taxi-spec variant and Hilux range of pick-ups remained the same.
Bermaz Motor, the official dealer for Mazda, said it was reducing the prices of the entire Mazda line-up in Malaysia, offering savings of about 2.7%.
The benefits for consumers
Robotics & IoT Institute CEO Madani Sahari told FMT the incentive would encourage consumers to consider buying a car now, rather than waiting. “It is important for the industry to maintain sales at a minimum of 500,000 units this year to remain sustainable in the long run.”
But he advised buyers to base their decisions on affordability and look at used cars as well. They must also take into account the other costs, such as fuel consumption, wear and tear, safety and maintenance.
At the time of the announcement, Malaysian Automotive Association (MAA) president, Aishah Ahmad pointed out that consumers would be paying zero tax for CKD vehicles and 5% for CBU cars.
“We think the increase in total industry volume (TIV) for this year will be more than forecast, backed by this incentive. However, it is still early to predict whether our initial projected TIV of 607,000 units earlier this year would be achievable,” a local daily reported her as saying.
Consumers must have a clear picture of their current financial standing and decide whether a car is a necessity.
They should not jump into buying a car just because it is slightly cheaper. They should carefully consider whether they can take on the new financial commitment during these uncertain times.