In a rather abrupt u-turn, the Ministry Of Finance (MOF) has now granted an extension of the Sales and Service Tax (SST) Exemptions for the period until 30th Jun 2021. This is undoubtedly good news for the consumers who have been clamouring to secure their vehicle purchases before the end of the year.
In a letter dated 29th December 2020 to the Malaysian Automotive Association (MAA) and Association of Recond Car Dealers (PEKEMA), the Ministry Of Finance confirmed the extension, despite earlier stating that the SST exemption period would end on 31st December 2020.
The tax exemptions include:
- 100 Percent Exemption of SST for all locally-assembled (CKD) passenger vehicles (excluding commercial vehicles and pickup trucks)
- 50 Percent Exemption of SST for all fully-imported (CBU) vehicles
- 50 Percent Exemption of SST for all used/recond (CBU) vehicles
MAA had previously requested for the SST exemption period to extend to the end of June 2021 to further aid manufacturers and importers clear their existing stock, but it was declined by the MOF, making this a rather unexpected turnaround, at the very last minute.
Though this may come as good news for car buyers, it would undoubtedly mean car makers would now have to scramble to revise prices and delivery deadlines which could result in delays to customers.
This will also mean revisions to certain car prices car like the GR Yaris and both new BMW M models, the M3 and M4.