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Full SST Back On July 1st: Too Many Bookings, Too Little Time?


Full SST Back On July 1st: Too Many Bookings, Too Little Time?

The confirmation that the SST ‘tax holiday’ on new vehicles will end on June 30th as scheduled was tinged with a pretty big caveat. Does that render the 31 March 2023 deadline meaningless?

You now have - officially - until 30th June to enjoy SST exemption on your next new car. That is a 100% SST reduction if your car is locally assembled or a 50% SST discount should your car be a fully imported unit.

The Finance Ministry, ignoring cries by the public and organisations alike, has put its foot down to assert that there will be no further extension, capping the timespan for which this SST exclusion period was active at 2 years.

BMW Delivery Bay

SST exemption ends June 30 but...

But….along with this deadline comes a pretty glaring condition. Where before it was assumed that you have to have taken delivery of your new vehicle within this window to enjoy these reduced prices, you now have until 31st March 2023 to get the keys (or key fob these days) to be handed over to you.

That’s a pretty big deal as it opens the door for people to fill up order books en masse, as long as you have a few hundred Ringgit to spare, which of course showroom sales associates are only too happy to accept.

Good thing for them that it’s not actually ‘books’, in the physical sense, that are being filled out. They are digital records and technically unlimited. Booking fees are money into the showroom’s pocket, so it would be in their interest to accept as many of them as they can take. It’s a loophole in the car buying process that was innocuous enough before this but is poised to be heavily exploited until the 30th of June 2022. 

Mazda Roadshow 2019 - Malaysia

Book the car before June 30, 2022 but can you receive it before March 31, 2023?

Since there really is nothing else involved with making a booking for a car apart from the transfer of cash (or online bank transfer), apart from maybe a receipt, you don’t get a certificate of allocation or, apart from their best guess for when the car may or may not be ready, any indication of where you stand in the queue of other buyers or any guarantee that the car will arrive in time for March 2023. 

The government also has no oversight on these bookings or a clear definition of what this constitutes, deferring that responsibility to the dealership itself, meaning that a booking is a booking because the dealer says so. How can any authority verify that a booking was truly made before 30th June and not ‘snuck in’ days or weeks after the fact?

This expectation of self-policing is a slippery slope, but assuming there’s no hanky panky, as long as you get your booking down before 30th June 2022, which is plenty of time, you’re in the clear - regardless if you made 1 booking or 10. It’s like buying lottery tickets, almost. Put your eggs into as many baskets as you can. Diversify.

KLIMS 2018

As far as we know from talking to a number of showroom employees and dealer principals, there are no protections in place to stop people from making multiple bookings. Most showrooms also maintain a 100% refundable booking fee policy, so the risk is relatively minimal to the potential buyer.

It’s possible, even likely, that automakers will be bombarded with bookings until June 30th, stretching the projected delivery date well beyond where it was prior to this announcement. Should any of these bookings be cancelled and refunded at a later date due to being false positives, it will not be a fun time for the automaker or their accountants to keep track of funds lost and fluctuating projections of cars needed to be manufactured/ assembled. 

Remember, there was already a new vehicle delivery issue, to begin with, due to widespread supply chain issues and a longstanding global semiconductor shortage.

Global Chip Shortage - SOC Wafer

In the end, it’s clear that the Finance Ministry wasn’t being as firm or decisive as it should have been. Though the SST holiday deadline set at 30th June (next week at the time of this writing) is technically accurate, it’s obvious the real cut-off point has been set at 31st March 2023. And who knows if this ‘shadow deadline’ will be extended should there be too many bookings to fulfill.

Like the month of free RapidKL public transport rides recently announced by the Prime Minister to coincide with the start of operations for Phase 1 of the new MRT Putrajaya line, many Malaysians have attached political motives behind this move to this indirect extension of the new car SST ‘tax holiday’ - not wanting to anger the Rakyat in the approach to the 15th general election with higher car prices after July 1st by significantly softening the blow as long as you make a trivial booking before June 30th.

A cunning plan.

Jim Kem

Jim Kem

Content Producer

There's just something about cars. It's a conveyance, it's a liability, it's a tool; but it can also be a source of joy, pride, inspiration and passion. It's much like clothes versus fashion. And like the latter, the pursuit of perfection never ends.

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