by AZALEA AZUAR / pic by TMR FILE

THE Malaysian Automotive Association (MAA) hopes that the government can extend the sales and service tax (SST) exemption for another six months.

The exemption is expected to end on June 30 this year and the association has already drafted an appeal to the Finance Ministry (MOF).

According to MAA President Datuk Aishah Ahmad, the SST would not be fair to her members as they are currently facing microchip supply shortages due to the Covid-19 restrictions.

Read more: MMA: Vehicle sales up 8% MoM in February

Without the extension, she said, car prices on the road (OTR) will also increase from 8% to 20%.

“I think in 2020, the government changed the division of the open market value to say that other than manufacturing costs will be included in the calculation of excise duty, which means if that happens, the car prices OTR will increase from 8% to 20%,” she explained during a press conference after MAA’s annual general meeting (AGM) today.

Moreover, Aishah added that the demand for Electric Vehicles (EV) has improved since the government announced the Zero Import Duties as well a Sales Tax Zero for Completely Knocked Down (CKD) and 50% for Completely Built Up (CBU) vehicles.

Read more: MAA forecasts 600,000 units TIV for 2022

Although the demand is there, the numbers are still small as only 274 units of EVs sold

“In February this year, only 30 units were sold but there is definitely a lot of interest and people are gearing up to build up EVs in Malaysia.

“Moving forward, I think we will see a lot more, especially when the infrastructure is ready to accept it,” she said.

While EVs are expensive, Aishah was confident that the demand will increase with more exposure.

MAA’s total industry volume (TIV) for February 2022 was up 8% compared to the previous month due to automotive companies ramping up their production to fulfil backlog orders.

It has also observed a 10% increase in its year-to-date (YTD) sales volume for February 2022 to 84,303 in 2022 from 76,840 in 2021.

Its total YTD production has increased 11% to 94,252 units this year compared to 84,865 last year.

MAA predicts the outlook of the automotive industry to be a positive one as they expect March sales to remain higher than February’s.

This is due to the push for higher sales by companies having their financial year which is ending on March 31 as well as a longer working month.