This Association Asks for Car Tax Incentives to be Extended to December

The Malaysian Automotive Association (MAA) has asked the government to extend the sales tax exemption incentive on cars until December 2022.

MAA President Aishah Ahmad said this year was a good opportunity to increase car sales and restore the automotive sector. To that end, he asked for an extended sales tax exemption incentive on cars.

“The number of car sales is expected to soar in May and June,” he said, quoted on Wednesday (11/5/2022).

Aishah said she had sent a letter to the Ministry of Finance to extend the sales tax exemption incentive period for cars. However, the association has not yet received a response to the proposal.

He explained that an extension of the incentive period was needed to maintain the momentum of the automotive sector’s recovery. Extended time is also required to complete the manufacturer’s unfulfilled backlog of orders.

Aishah assessed that the provision of tax incentives was proven to be effective in maintaining car sales performance in 2020 and 2021 from the pressure of the Covid-19 pandemic. Despite the contraction, the condition was not as bad as initially thought.

“Tax exemptions have helped spur and sustain car sales during the pandemic,” he said as reported by thestar.

Earlier this year, Minister of Finance Tengku Datuk Seri Zafrul Abdul Aziz announced again the extension of the sales tax exemption incentive on cars until June 2022. The tax incentive has been given since June 15, 2020.

Tax incentives apply to every purchase of domestically or imported cars. For local cars, sales tax exemption is given at 100%, while for imported cars it is only 50%.

Currently, the government sets the sales tax rate for vehicles at 10% for locally made and imported cars.

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