According to Deputy Finance Minister Datuk Ahmad Maslan, the implementation of the goods and service tax (GST) is not an excuse for automotive players to not lower car prices, he told Bernama. He was adamant that prices of cars should drop, as the current 10% sales tax will be replaced by the 6% GST rate.
“It’s a simple calculation to understand, and automotive industry players should not find an excuse not to lower car prices by blaming it on the GST,” he said. The argument made by some that prices will not necessarily come down – as a result of the GST being imposed at every level of the production and distribution chain – were countered by Maslan, who commented that unlike the sales and service tax, this one is eligible for claims.
It has been widely reported that Finance Ministry and International Trade and Industry Ministry officials have asserted that prices will indeed drop by 1% to 3%.
“Indeed, we expect car prices to fall, but we are not certain of the rate,” said Maslan. According to him, the government has come up with plans to lower the prices of certain goods, so naturally, the prices of cars should take a dive.
Out of 944 items, 532 will be exempted from GST will their respective prices reduced based on the calculations of the multi-layered sales and service tax levied on them. The 6% GST is set to replace the 10% sales tax and 6% service tax when it comes into implementation from April 1 2015.
The post GST not an excuse to not lower car prices, says Deputy Finance Minister Ahmad Maslan – report appeared first on Paul Tan’s Automotive News.
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