The sales and service tax (SST) exemption for new vehicle orders will not be extended beyond June 30, Finance Minister Tengku Zafrul Aziz has announced.
However, Tengku Zafrul said buyers who have already ordered their vehicles by June 30 will be allowed until March 31 next year to register their vehicles with the road transport department (JPJ).
He said this will ensure that they can still benefit from the tax incentive despite the drop in production of cars amid the shortage of semiconductor microchips and supply chain disruptions.
A full waiver of the tax is granted to locally assembled cars and a 50% waiver on imported cars until June 30, an initiative introduced by Putrajaya amid the Covid-19 lockdown.
The Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) had previously urged Putrajaya to extend the SST exemption as many buyers had yet to take possession of their cars.
FMCCAM president Tony Khor was reported to have said if the vehicles were not handed over to the customers by the end of this month, the customers would be subject to SST, which would affect car sales.
Tengku Zafrul said since the exemption was introduced on June 15, 2020, some 868,422 vehicles had been sold, with a total of RM4.7 billion in SST revenue being waived by Putrajaya.
He said that about 264,000 units that had been ordered during the exemption period had yet to be delivered to their new owners because of global supply chain disruptions.
“The extension of the vehicle registration period is a midpoint solution to balance between consumers’ interests and the country’s tax revenue.
“The latter needs to be ramped up post-pandemic to ensure that the people’s welfare and the country’s economy continues to be preserved,” he said.
