SST Vs GST – Which Tax Will Result In Lower Car Prices?

The Sales and Services Tax (SST) implementation is about to be over and the Goods and Services Tax (GST) will be back!

According to Datuk Seri Ismail Sabri Yaakob, this move resulted in a whopping RM20 billion in annual revenue losses, which is why the Malaysian government is currently considering returning to GST. If this is true, it could be good news not only for Malaysia as a whole, but also for the automotive industry.

Theoretically, car prices could fall by 1-6 percent if the Malaysian government decides to replace the current 10% SST with the previous GST of 6%. Dato Seri Ismail also stated that they are aiming for a'reasonable' GST tax rate percentage that will benefit both people and businesses, so things remain uncertain at this time.

Does this mean car prices will be more expensive?

If we use 2015 as a baseline, when GST was introduced at 6%, the majority of cars saw price decreases across the board for all brands. There are a few exceptions where a number of specific models increased, but only marginally.

Proton, for example, saw a price drop of up to 3.25 percent, or RM1,475 on all of their models (Iriz 1.3 CVT Standard). Another example from Honda Malaysia saw prices drop by up to 2.38 percent, with the exception of the Odyssey CBU model, which increased by 0.44 percent or RM1,008.

Despite this, there is still a chance SST exemption will be extended again, possibly until the end of the year?