ABOLISHING EXCISE DUTIES ON CARS IN MALAYSIA
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The aim of this petition to make a request from our new government to abolish excise duties on cars. Car prices in Malaysia are generally expensive because of two reasons. The first reason is Proton. Before the invention of Proton, car prices were considerably cheaper in Malaysia before 1983. The moment Proton was created, the old government decided to introduce a tax which can make foreign vehicle prices to increase for Malaysians by no choice to support and buy Proton cars. This causes the car price to be among the second highest(2nd) in the world after Singapore. The tax which was introduced is called excise duties. The tax ranges from 75% to 105% depending on the car cc. For example, take a sedan car, for instance, the excise duties on cars below 1800cc are 75%. Cars above 1800cc-1999cc stands at 80%, car above 2000cc-2499cc stands at 90% whereas cars above 2500cc at 105%. This is only for sedan vehicles. The other size vehicles such as SUV, MPV, and 4x4 have a different range of excise duties. I have attached a file that shows the range of cars that depending on the size below. This is only excise duties. If we take into account other taxes such as local assembly (CKD) or import (CBU) the tax is at 10% and 30% respectively. On top of that is sales tax which is at 10%. This is among the reason why our car prices are expensive in the world.
The second reason is that the old government led by our 4th prime minister Tun Mahathir wants to protect the local automotive industry consists of component manufactures and those close to the old government. Now since the new government led by Pakatan Harapan (PH) coming up with the third national car project, there is fear among Malaysians that it is going to be another Proton. Even though Malaysian rejected the idea, the government still proceed with the project even though those involved in the project denied that the new national car project does not depend on the Malaysia government for any cash. Well since Proton has sold out to Geely, there is no need for the new government to protect Proton unless they have their own agenda such as the third national car project. DAP veteran Lim Kit Siang has said back in 2003 that with the introduction of AFTA, Barisan National government should no longer support national car. PKR has promised to abolished excise duties way back in 2012 when they were in opposition. This has been used as an election pledge among voters during the GE13 election. Rafizi Ramli has launched kempen #turunkanhargakereta. He also said that PKR government will abolish all the excise duties and CBU/CKD taxes stage by stage within 5 years while maintaining sales tax which is at 10%. PKR has won the popular votes during GE13 due to this where many youths have voted for them.
They said that the excise duties will be abolished stage by stage within 5 years once they take over the government. Let say a Honda City has a total of 40% of tax including excise and local assembly tax, each year the tax will be reduced by 8% for the next 5 years. At the same time, the used car market will not immediately affect by sudden dropped of prices as the tax percentage will be adjusted according to the value of the tax drop in each year. This is how basically excise duties abolishing will work.
If the market is open up, the car manufacturing industry can reduce wastage, inefficiency and corruption among the Malaysian car can be more competitive if the culture of unlimited protectionism is eliminated. Back in 2017, PRK MP Wong Chen has called for excise duties on foreign cars to be phased out following the agreed 49.9% sale of Proton Holding Berhad to China’s Zhejiang Geely. He has said that the sale meant that Proton no longer a national car thus the excise duties can be gradually abolished within 3 years.
Back in 2014, the previous government has launched Energy Efficient Vehicle (EEV) or EEV is an integral part of the NAP 2014. In fact, the main objective of the new policy is to make Malaysia the regional automotive hub of EEV. Carmakers that have either established EEV facilities in Malaysia, have been given an EEV manufacturing license or produce vehicles that have been granted EEV status. This is where the problem has started. Since we as a consumer does not know-how much percentage of tax is exempted from the EEV status, some car distributors in Malaysia took advantage of it where they do not pass the savings from the EEV tax break to the consumers. You can take a look at the price of EEV certified vehicles such as Honda City and Toyota Vios.
Other than that, the public transport system in the rural area is not there including some of the urban areas. This is where people need to find their own transport mode to get to their destination.
I hope this petition will reach to our Minister of International Trade and Industry YB Datuk Ignatius Darell Leiking, Deputy Minister of International Trade and Industry Dr Ong Kian Ming, Finance Minister Lim Guan Eng and Prime Minister Tun Dr Mahathir Mohamed to abolish the excise duties. Therefore, I need fellow Malaysian to help me sign the petition and share among your family members and friends to support this cause.
The prices for different car brands and models. The comparison includes the prices before tax and after-tax while maintaining the 10% sales tax.
(I)TOTAL PRICE including Excise Duties, CKD/CBU TAX
(II)TOTAL PRICE excluding Excise Duties, CKD/CBU TAX
PERODUA MYVI 1.5
(I) RM 54,090*
(II) RM 32,454
(III) RM 21,636
HONDA CITY 1.5 V
(I) RM 86,983*
(II) RM 52,189.80
(III) RM 34,793.20
HONDA CIVIC 1.5 TC-P
(I) RM 128,631*
(II) RM 70,747.05
(III) RM 57,883.95
TOYOTA CAMRY 2.5V
(I) RM 196,888
(II) RM 98,444
(III) RM 98,444
(I) RM 195,390*
(II) RM 97,695
(III) RM 97,695
BMW 3 SERIES (330i M Sport)
(I) RM 328,800
(II) RM 147,960
(III) RM 180,840
BMW 5 SERIES (530i M Sport)
(II) RM 186,400
(III) RM 186,400
BMW 7 SERIES (Le xDrive)
(I) RM 594,800*
(II) RM 267,620
(III) RM 327,180
*Since the prices above including the tax exemption given under the Energy Efficient Vehicles(EEVs), the final price excluding the excise duties may vary.
Some cars we are paying 1-2x more than the actual price.
Here are the links for the abolishing of excise duties on cars in Malaysia.
This is the link for the ranking of car prices in the world.
http://limkitsiang.com/docs/ENG-Manifesto-BOOK.pdf (Refer to Page 24&25)
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