The Malaysian Automotive Association (MAA) is appealing to the Malaysian government to extend the current sales tax exemption, which expires on June 30 this year. “The MAA has appealed to the finance ministry to increase the sales tax exemption, but so far, we have not received any response,” said MAA president Datuk Ayesha Ahmed. They.
Ayesha said the local automotive industry could see sales growth in May and June as there is less than two months left to get sales tax exemption.
Meanwhile, RHB investment analyst Jim Lim said car sales are expected to be strong in the second quarter of 2022 as consumers are expected to try and take advantage of the remaining sales tax-exempt period.
“From the latest March production figures, we can see that carmakers are increasing production to the best of their ability, and in the midst of a shortage of chips and parts, to help consumers take advantage before the end of the sales tax exemption,” Lim said.
“When the government zero-rated the Goods and Services Tax (GST) for three months in 2018, the temporary tax holiday created a huge surge in demand for cars,” he said. They An industry observer was quoted as saying.
Many just wanted to capitalize on lower prices, but when the tax holidays are over, car sales drop immediately, not just because of the price. [then became] Higher, but no one wants to buy [cars] And for months after the end of the tax holiday, many auto companies have been fighting to sell new cars, ”added an industry observer.
For the June 20 SST holiday cut-off, more affordable brands like local-made Proton and Peruvian are more likely to face a bigger impact because their customers are more price-sensitive, while premium brands are less likely to be affected, Lim said.
The zero-rated GST pricing structure has been in effect since June 1, 2018, resulting in a 50% increase in car sales over the previous month as consumers waited for the price to be reduced to zero-rated GST. . It is the second best monthly TIV in the history of automobiles in Malaysia.
This was followed by sales and service tax (SST) which came into effect from September 2018, and car supplies were 52% lower in that month (31,241 units) than in August 2018 (65,551 units). The MAA blamed car companies for the decline, with car stocks declining due to excessive demand during the zero-rated GST period.
Most recently, car sales in Malaysia in March 2022 saw a total of 73,222 car deliveries that month, up 28,171 units or 62.5% more than the monthly number from February.
Compared to the same month last year, March 2022 car sales were 12.76% (8,284 units) higher, with year-to-date total for the first three months of the year being 159,752 units, or 7.8% (11,597 units) higher than the same period last year.