Business

Tax-free window period may reduce vehicle prices

Media release by Ministry of Finance Malaysia.

Media release by Ministry of Finance Malaysia.

Ahirul Ahirudin
Written by Ahirul Ahirudin

KUALA LUMPUR – May 18, 2018: Although the Sales and Services Tax (SST) will be reinstated, consumers will get to enjoy a few months of tax holiday since the Goods and Services Tax will be effectively abolished from June 1.

Tun Daim Zainuddin, who chairs the Council of Eminent Persons formed by the new government, said the SST is  only expected to be reintroduced in the next two to three months since it will require legislation to be passed in Parliament.  

According to prominent automotive portal Paultan.org, this could potentially cause a tax-free window where there will be no tax after June 1 until the SST is reinstated.

This means that buyers of cars and bikes will, in theory, benefit from this tax-free window.

Auto analyst Hezeri Samsuri however thinks the new government will not allow this window to last too long since it involves a lot of money.

“Car prices will at least drop by 6 per cent or even more, depending on the manufacturer.

“I’ll be rejoicing if that happens, although I believe the government will not want to deprive itself of too much tax income. I think they will re-introduce SST as fast as possible,” said Hezeri.

Datuk Razak Al-Malique Hussain, chief operating officer of Fast Bike Sdn. Bhd., the distributor of Triumph motorcycles, said prices at his outlets may be reduced by about five per cent during the tax-free window.

But when the SST is reinstated he expects slightly higher prices for most cars and motorcycles. When the GST was implemented in 2015, there was a price reduction for most cars.

Edaran Tan Chong Motors sales and marketing director Christopher Tan told the media on Tuesday that prices of Nissan vehicles may actually go up slightly if the previous 10 per cent SST was reinstated.

 

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Ahirul Ahirudin

Ahirul Ahirudin