Imported Cars Likely To Be Cheaper Under New Tax Structure

KUALA LUMPUR, Oct 19 (Bernama) -- The government, Wednesday announced the new tax structure for motor vehicles comprising lower import and excise duties effective Thursday, a move which is likely to make imported cars cheaper.

Under the new taxes announced by the Ministry of Finance which would liberalise further the country's auto sector, import and excise duties for cars both from Asean and other countries have been reduced.

Import duties on Asean CBU vehicles will be reduced to 15 percent from 20 percent and that of non-Asean CBUs have been reduced to 30 percent from 50 percent.

However, the Finance Ministry said the zero percent import duties on Asean CKD (Completely Knocked Down) passenger cars and 10 percent on non-Asean CKD remain unchanged.

Excise duties on passenger cars have been reduced to 80-100 percent from 90-250 percent and for 4WDs to 55-160 percent from 60-170 percent.

Excise duties on motorcycles was also reduced to 20-50 percent from 20-60 percent and for CKD/CBU MPVs (Asean and non-Asean) have been raised to 55-160 percent from 40-170 percent.

The statement said the classification and tax structure for cars using diesel and petrol has been made uniform.

Generally, it said, changes to the tax structure would reduce the duty on passenger cars but duty on MPV/van and 4WD would increase.

Although the new tax structure takes effect Oct 20, exemption will be given for goods on transit.

The Finance Ministry also said that the formula for excise duty on Completely Built-Up (CBU) vehicles were changed based on tax on tax.

Before this, excise duty on CBU vehicles was based on the value of Cost, Insurance and Freight (CIF).

Under the tax on tax formula, the value of excise duties will be based on the CIF value including the import duties.

-- BERNAMA