SST extension for Malaysian car buyers might not happen

SST extension for Malaysian car buyers might not happen

Car manufacturers want an SST extension but is it worth the effort? 

For the past few weeks, the government of Malaysia has been pushed hard by some car manufacturers and also the Malaysian Automotive Association to grant an extension to the Sales Tax exemption on all new cars (SST). 

This move has already cost the Malaysian tax department billions of Ringgits in the previous year in lost revenue and at this time, this is much-needed income for the government to keep public programs and subsidies for the poor running. 


Buying a new car in Malaysia is a luxury and one that has been second to a house purchase for years. However, in recent years it has been ‘pushed’ harder as exciting new models get released by car manufacturers with snazzy features and let's not forget the current ongoing electric car (EV) ownership hype that has hit the upper middle class and also rich Malaysians.

Premium car manufacturers are quickly trying to get as many stocks of new electric cars as possible to quench the thirst of buyers as the current ‘FREE’ yearly road tax and ‘ZERO’ import duties for EVs are pushing demand high. Waiting lists for shiny new EVs have moved to more than 6 months with some even as long as 12 months. 


New EVs are priced from RM169k upwards and it is the EVs costing more than RM250k that are selling really well. This means the upper middle class is buying this technology-filled vehicles and so let them pay the full price with SST. 

So, if we were sitting in the Malaysian finance department we would push for a NO SST extension as there are still many Malaysians with enough savings and income to buy a new EV and also new petrol-powered car at a full selling price, so why offer this high income and net worth Malaysians a tax cut (SST) when any savings should be accorded to the lower income group of Malaysians who really need to save money in any way to put food on their dining table daily.

The SST collection can be used to subsidise RON95 fuel for the lower-income Malaysians easily. Yes, there are some car brands that are still holding ageing stocks of older less popular models and having an SST extension will help clear their stocks before 2022 comes to an end, but this is just a handful right now and ageing stocks should anyway be heavily discounted by the showrooms to make way for current and future models.

Also read: GST coming back to Malaysia and how will car prices move

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