KUALA LUMPUR: It is uncertain if vehicle prices will be reduced with the implementation of the Sales and Services Tax (SST) as the proposed rate of 10 per cent is higher than the six per cent Goods and Services Tax (GST), said industry players.
Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said the SST and the tax mechanism would play an important role in determining vehicle prices.
She said MAA was expecting the government to lower the SST.
“Before GST was implemented, SST was 10 per cent. If we consider this figure, we expect the prices of vehicles to increase, post-SST. This is an easy estimate if the rate is the same.”
Aishah said MAA recommended that SST be lower than GST so that vehicle prices would decrease, thereby attracting more Malaysians to buy vehicles.
“We look forward to the government’s decision on SST. When GST was implemented, car prices decreased slightly.”
Meanwhile, Perusahaan Otomobil Kedua Sdn Bhd (Perodua) could not determine whether prices would be higher or lower with a 10 per cent SST.
President and chief executive officer Datuk Dr Aminar Rashid Salleh said it was too early to speculate about the prices.
He said Perodua would meet with stakeholders to find out more details on the SST.
“We will be ready for SST and we are awaiting the government’s decision.”
Some car companies have introduced various promotions following the move to zero-rate the GST next month.
Analyst Shamsul Yunos said if SST was 10 per cent, the prices of vehicles would be higher than now.
“I think the government should reduce the SST to six per cent in an effort to expand the automotive industry, especially in today’s slow market conditions.
“I believe it is considering a more appropriate percentage rate,” he added.