Malaysia Ending Duties on Vehicles From Oz, Japan
A government official says the phase-in will allow the industry to adapt to tax liberalization and to ensure the 300,000 people it employs directly and indirectly are not adversely affected.
The Malaysian government is ending import duties on vehicles from Japan and Australia.
Minister of International Trade and Industry Mustapa Mohamed says the tariffs, now at 15% for Japan and 13.6% for Australia, will be phased out to zero by 2016. The Star newspaper says the duties will be reduced to 10% in 2014 and 5% in 2015.
The government’s Bernama news agency quotes Mustapa as saying federal officials have been working with auto makers to voluntarily reduce their car prices.
The tax liberalization will be gradual to allow the industry to organically adopt and adapt itself and to ensure the 300,000 people it employs directly and indirectly are not adversely affected, he says.
The gradual opening of the Malaysian automotive industry will further encourage new and existing manufacturers to use the country as their production hub for the region, especially for fuel-efficient cars.
“The car industry ecosystem is huge and very important, in a lot of countries in the world, therefore careful thought must be given,” Mustapa says.
Malaysia has three taxes on vehicles: the import duty, excise duty and sales tax. Cars imported from the 10-member Association of Southeast Asian Nations members are brought in duty-free.
“We have two trade agreements which are going to materialize in the next three to four years – Australia and Japan,” The Star quotes Mustapa as saying.
“Import duties (including cars and other items) coming from these countries will be zero (duty) come 2016. We will definitely prepare our local automotive industry to face this landscape and the expected increase in competition intensity.”
Malaysian auto maker Proton welcomes the government’s intention to gradually adopt new policies for the automotive industry as a way to reduce car prices.
“As this involves the entire ecosystem of the industry, Proton will further study all aspects relating thereto and the possible impact it has on not only the company but (also) the entire local automotive industry, to ascertain its next course of action, future plans and directions,” the auto maker says in a statement.
Proton says it already has been anticipating policy shifts toward market liberalization, and the company is optimistic it can compete in a fully liberalized market with affordable and good-quality cars.
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