13th June 2022 - 2 min read
Transport Minister Datuk Seri Dr Wee Ka Siong has said that the government may extend the sales and services tax (SST) exemption that is currently offered for new vehicle orders, and will announce a decision on the matter very soon. This is following appeals from a number of associations.
“I am aware that the Federation of Motor and Credit Companies Associations of Malaysia (FMCCAM) is requesting for the exemption to be extended further as some car buyers may not get to enjoy the incentive due to delays in car deliveries. This delay is caused by the shortage of chips and the supply chain disruptions due to the [Covid-19] pandemic. Nevertheless, the government is considering this proposal and a decision will be announced very soon,” said Datuk Seri Dr Wee.
The minister also acknowledged that the motor industry had been badly affected by the numerous lockdowns implemented over the past two years in a bid to combat the spread of Covid-19. He also agreed that extending the exemption will lead to more potential car buyers, thereby aiding in the recovery of the motor industry.
In May 2022, the president of FMCCAM, Tony Khor had noted that about 80,000 new car orders will be affected if the government declines to extend the ongoing SST exemption – which is set to end by 30 June 2022. These buyers will be forced to pay SST if they do not receive their vehicles by the end of this month, which in turn, may affect the sales of vehicles.
Aside from FMCCAM, the Malaysian Automotive Association (MAA), too, had previously appealed to the government for an extension of the SST exemption. However, MAA said that it did not receive a response from the relevant ministries at that time.
The ongoing SST exemption allows car buyers to enjoy a full waiver of SST for locally assembled cars, and a 50% waiver on imported cars. It was originally introduced as part of the PENJANA stimulus package back in June 2020, in an attempt to stimulate the economy after the first movement control order (MCO). Initially scheduled to end on 31 December 2020, it was eventually extended three times after that – to 30 June 2021, 31 December 2021, and then finally to 30 June 2022.
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