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Decision on motor sales tax exemption ‘very soon’

The motor credit federation says about 50,000 new car orders might be affected if the exemption is not extended. (File pic)

PETALING JAYA: Putrajaya will be making a decision “very soon” on proposals for an extension to the sales and service tax for new vehicle orders, says transport minister Wee Ka Siong.

In a speech to the motor credit federation, Wee acknowledged that the motor industry had been badly affected by the various Covid-19 lockdowns in the past two years.

“I am aware that the Federation of Motor And Credit Companies Associations Of Malaysia is requesting for the exemption to be extended further as some car buyers may not get to enjoy the incentive due to delays in car deliveries,” he said in his speech.

“This delay is caused by the shortage of chips and the supply chain disruptions due to the pandemic. Nevertheless, the government is considering this proposal and a decision will be announced very soon,” he said.

On May 30, the federation’s president, Tony Khor, said about 80,000 new car orders would be affected if the government does not extend the SST exemption, which ends on June 30.

With many buyers yet to receive their orders, Khor said if the vehicles were not handed over to the customers by the end of this month, the customers would be subject to the sales tax, and sales might be affected.

A full waiver of the tax is granted to locally-assembled cars and a 50% waiver on imported cars until June 30. This initiative was introduced by Putrajaya amid the Covid-19 lockdown.