Mustapa: Proton paid RM24b in taxes

Proton Holdings Bhd has paid RM24 billion in taxes to the government since the national carmaker’s incorporation in 1983.

Minister of International Trade and Industry Datuk Seri Mustapa Mohamed told Dewan Rakyat yesterday that a significant portion of Proton’s payment was excise duty and sales tax.

On the other hand, the government has provided soft loans and grants worth RM15.3 billion to Proton since 1984, said Mustapa.

“The government has provided RM2.7 billion in grants and soft loans, while the remaining RM12.6 billion is in the form of revenue foregone,” the minister said in response to a query from Rompin MP Datuk Seri Hasan Arifin.

The RM2.7 billion fund includes a launching grant of RM500 million in 1984, RM110 million from automotive development fund for vendors,

RM100 million in fleet test vehicle grant in 2012, research and development grant of RM494 million between 2006-2010 and a soft loan of RM1.5 billion in 2016.

Hasan had asked Mustapa to state the government’s assistance to Proton since its inception and what the automaker stands to benefit via its strategic foreign partner, China’s Zhejiang Geely Holding Group Co Ltd.

Mustapa said the collaboration with Geely, which has a vast track record in transforming loss-making automotive companies, namely Volvo Car Group and London Taxi Corp Ltd, will benefit Proton tremendously.

According to Mustapa, Proton will share Geely’s model and platform, where both companies will share resources to develop new products, while being the Chinese firm’s right-hand drive manufacturing hub.

Proton will also ride on Geely’s existing marketing network in China, Asean and the Middle East and North African region to increase car sales to 500,000 units yearly.

Mustapa added that Proton does not enjoy any form of special tax reliefs or monetary incentives, as widely speculated.

“Currently, Proton does not enjoy any privileges, but only incentives which are also received by other eligible car manufacturers such as import and excise duties reduction or exemption, as well as investment tax allowance,” he said.

Proton’s majority shareholder DRB-Hicom Bhd and Geely signed the final share sale agreement last month, which sees the latter acquiring 49.99% of Proton and 51% of luxury sports car brand Lotus in a deal worth RM1 billion.

Geely is buying the Proton stake for RM460.3 million, of which RM170 million is cash and the remaining RM290 million in the form of a transfer of the former’s SUV platform Boyue.

The next step will see Proton venturing into the SUV market through the rebadging and later the development of its own SUV under the platform.

As for the Lotus stake, Geely will be paying £100 million (RM540 million) to Proton for the 51% stake.