Automotive, News

Government Studying Possibility of Extending Sales Tax Exemption on Cars

The government’s sales tax exemption on locally assembled (CKD) and fully imported (CBU) cars was previously extended to 30 June 2021, and it may be extended yet again. According to Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, the government is currently studying this possibility.

According to Zafrul – as per The Star’s report – the ministry was studying the data to decide whether or not to continue the sales tax exemption on CKD and CBU cars. Sin Chew Daily also wrote the same thing, though the publication elaborated that a decision is expected to be made in the next week or two.

The Ministry of Finance (MoF) initially introduced this sales tax exemption on cars – under the government’s Short-Term Economic Recovery Plan (PENJANA) – to drive more growth to the local automotive sector amidst the COVID-19 pandemic. Evidently, it’s working very will, with car brands posting very encouraging sales figures.

That being said, the COVID-19 pandemic has disrupted the supply chain of many carmakers, including Proton. Take the hugely popular Proton X50: because of the various Movement Control Orders (MCO) and shutdowns caused by COVID-19 clusters, the production of the X50 is delayed quite a bit.

By extending the sales tax exemption on CKD and CBU cars, carmakers will have more time to catch up to consumer demand, so more customers will be able to enjoy the tax saving. Rest assured, will keep a close eye on any pertaining announcement from MoF.

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