A RESTRUCTURING of import duties on cars is being discussed by the Finance Ministry and the International Trade and Industry Ministry (Miti), Finance Minister Lim Guan Eng said.

The National Committee on Investments comprising officials from both ministries and chaired by the two ministers in charge is studying the matter.

“Car excise duties used to be under Miti, but now we have a joint committee that looks at not only investments but at duties and taxes. However, wait for a joint announcement to be made,” Lim told a press conference in George Town today.

Last year, the International Trade and Industry Ministry said it might be looking at a reduction in excise duty for vehicles, which would result in lower prices for cars.

It added although the government would be collecting less in excise duty, it could be compensated by higher sales volume.

Deputy International Trade and Industry Minister Ong Kian Ming said last January this would be a win-win situation for Malaysians, industry players and the government.

“Of course, there is a cost-benefit involved here, that you have more tax reduction in the excise duty. The government may collect less per unit, but whatever revenue lost by the Finance Ministry can be regained by the increase in sales because car prices will be lower.

“The original equipment manufacturers get to sell more cars, consumers get to benefit from lower car prices and the Finance Ministry gets to benefit as well, when it gets to collect more excise tax as a whole because of increased sales.

“This is something we want to work towards for all car models.”

Ong said industry players would give their expected sales increase estimates as a result of more excise duty exemptions.

Apart from the 10% sales and service tax, all vehicles are slapped with excise and import duty.

Excise duty is between 60% and 105%, calculated based on the car and its engine capacity.

Import duty can go as high as 30% depending on the vehicle’s country of manufacture.

However, import duty is not imposed on vehicles built in Asean countries and Japan. – January 5, 2020.