The Malaysian government announced it would extend the sales and services tax (SST) exemption for passenger vehicles sold in the country, which was due to expire at the end of 2021, by an additional six months to provide additional support to the automotive industry.
The announcement was made by finance minister Tengku Datuk Seri Zafrul Abdul Aziz as he unveiled the 2022 national budget and followed strict lockdowns across most of the country in the third quarter of 2021 to help contain the spread of the Delta strain of the coronavirus.
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Locally made passenger vehicles would enjoy full exemption from the SST until the end of June 2022 while imports would be given a 50% discount.
The government wants the local automotive industry to recover strongly from the pandemic and it has also struggled with the global shortage of semiconductors.
Vehicle sales in the first nine months of 2021 were down by over 7% at 318,874 units from 344,019 a year earlier, after a 12% decline to 529,434 units in 2020.
The minister also announced additional incentives for electric vehicles, including full exemption from import and excise duties and road usage taxes, and buyers would be given a tax credit of MYR2,500 (US$600).
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By GlobalData
