MoF’s car SST decision a win-win formula


IN APRIL this year, I placed a booking for a new European car through a dealer. But I was told that due to global supply chain disruptions, it’d take several months for me to take delivery of the vehicle.

I was told that in all likelihood, I could only get my car in October this year. This meant that I would have to fork out an additional RM9,000 plus for my car.

This is because the deadline for the vehicle Sales and Service Tax (SST) exemption is only until June 30. And unlike some other dealers, mine could not absorb the sales tax even if I had placed the order before the deadline.

I had no choice but to proceed with the booking, although I had to pay almost RM10,000 extra. This is because my 12-year current car was giving way, and the maintenance and repairs were burning a large hole in my pocket.

But imagine my delight when Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz announced that while the SST exemption deadline stays, those who placed their bookings during the tax holiday could still enjoy the benefit, so long as they register their vehicles before March 31 next year.

That means people like me will qualify for the SST exemption after all! 

For me and others who share the same predicament, that’s a huge savings. As we know, the economy has not fully recovered to (the level) pre-Covid times. Many are still cautious about the future, although the general consensus is that the worst is over.

The extra savings from the SST exemption could help ease our cashflow. And it’s not our fault that cars which used to take weeks to arrive, prior to the pandemic, are now taking months. Besides, cars are no longer a symbol of wealth or luxury. It is now a necessity, especially if you live far away from public transport systems.

Kudos to the Finance Ministry (MoF) for coming up with a mid-point solution to balance the interests of car buyers and government revenue. Since June 15, 2020, over 800,000 units of vehicles have been sold with car buyers enjoying the SST exemption.

I can understand why the tax exemption cannot be extended as it’d hurt the government’s finances. But with the MoF’s mid-way solution, we can now strike the delicate balance between these two competing interests.

  • Joseph Kalimuthu
  • Petaling Jaya