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Malaysian car prices are expected to increase once the new Sales and Services Tax (SST) kicks in on September 2018.
Malaysia’s leading auto trading distributor Sime Darby Berhad said it expects the prices of vehicles to increase following the implementation of the SST.
The SST was introduced by the Malaysian government to replace the unpopular goods and services tax (GST). Under the new SST tax scheme, goods will be charged an additional 5 to 10% tax, while services will be charged a 6% tax.
According to the company’s CEO Jeffri Salim Davidson, he predicts the overall automotive industry in Malaysia will be slightly weaken in the next few months before normalising again.
“It will be slow next quarter, but eventually, the market would reach an equilibrium,” said Davidson in a statement.
Sime Darby currently distributes several high-end car brands in Malaysia, such as BMW, Jaguar, Land Rover and Porsche. The company also deals more affordable vehicles, like Ford, Mini, and Hyundai.
Sime Darby Motors chief financial officer Nik Muhammad Hanafi Nik Abdullah also commented that the company will be looking at ways to absorb the costs, or to pass it down to the customers.
“It would have to depend on other players in the market and on certain models [of cars],” added Nik Muhammad.
The GST was effectively abolished on 1 June 2018. Customers have until tomorrow, 1 September, to enjoy the three-month tax holiday before the SST kicks in.
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