Government will not cut excise duty on cars

Government will not cut excise duty on cars
Business & Markets 2013
Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com
Wednesday, 03 July 2013 10:08

KUALA LUMPUR: The government will not be cutting down excise duty on imported cars to reduce car prices, said Deputy International Trade and Industry Minister Datuk Hamim Samuri.

"At this time, the ministry is not planning to decrease excise duty on imported cars as a mechanism to lower car prices," he said in Parliament in response to a question by Datuk Chua Tee Yong (BN-Labis).

Hamim added that the government will lose up to RM7 billion a year in revenue if it cuts down on excise duty on imported cars.

"The decrease of this tax proceeds could limit the government's ability to provide the basic needs of the citizens.

"Lowering car prices should be done in stages ... the government has outlined important steps that would be done in stages so that there will not be any huge impact on the domestic automotive industry," he said.

In response to another question by Mohd Rafizi Ramli (PKR-Pandan), Hamim said the decrease in excise duty will not guarantee a decrease in car prices within a short period of time.

According to Hamim, cars with an engine capacity of 1.3 litres in Malaysia were priced the lowest compared to countries such as Thailand and Indonesia.

He added that the fall in car prices is an important mission that will be achievable via the National Automotive Policy that is aiming for a competitive and efficient automotive industry.


This article first appeared in The Edge Financial Daily, on July 3, 2013.