Vehicle Valuation Method Review to Ensure Fair Taxation
The Ministry of Finance (MoF), together with the Ministry of Investment, Trade, and Industry (MITI) and the automotive industry, is currently reviewing the vehicle valuation method to ensure that tax is imposed fairly, neutrally, and consistently. This move aims to address concerns over the potential impact of new excise tax regulations on vehicle prices.
Clarification on Reports of Significant Price Increases
There have been reports of a significant increase in vehicle prices expected starting in 2026 due to new excise tax regulations under P.U.(A) 402/2019—Excise Tax Regulations (Determination of Value of Locally Produced Goods for Excise Tax Purposes. However, the MoF has clarified that these reports are inaccurate. The ministry has yet to make a final decision on the matter.
Current Situation and Future Outlook
The automotive industry has secured an extension on the proposed revision of excise duty for locally assembled (completely knocked down) cars until December 31 this year. Despite this temporary reprieve, it is likely that prices will increase significantly from 2026 onwards. The Malaysian Automotive Association has confirmed that the open market value (OMV) excise duty revision will be deferred to January 2026.
Potential Impact on Vehicle Prices
The postponement of the revised OMV excise duties is only for a year, and if implemented, it could lead to a price increase of between 10-30 percent. This could have a significant impact on the automotive industry and consumers alike.
Conclusion
The review of the vehicle valuation method is an important step towards ensuring that tax is imposed fairly, neutrally, and consistently. The MoF, MITI, and the automotive industry must work together to ensure that any changes to the tax regime do not negatively affect the industry or consumers.
FAQs
- What is the current status of the review of the vehicle valuation method?
The MoF, MITI, and the automotive industry are currently reviewing the vehicle valuation method to ensure that tax is imposed fairly, neutrally, and consistently. - What is the expected impact of the new excise tax regulations on vehicle prices?
The MoF has clarified that reports of a significant increase in vehicle prices are inaccurate, and the impact of the new regulations on prices is still unclear. - When is the expected implementation of the revised OMV excise duties?
The revised OMV excise duties are expected to be implemented in January 2026.