Proton cars still cheapest after tax cut, says Rafizi

By Ida Lim

July 27, 2012

File photo of people checking out the Proton Preve soon after its launching earlier this year. According to PKR, Proton cars will still be among the cheapest after the tax cut.

 

KUALA LUMPUR, July 27 — PKR’s Rafizi Ramli today said that Pakatan Rakyat’s (PR) electoral pledge to cut car taxes will not adversely affect national carmaker Proton, saying that local cars will still be the cheapest under the proposal.

PR is offering a complete revamp of the National Automotive Policy (NAP), including slashing hefty excise duties and reducing the triple-tax burden imposed on cars here, should it come to power in the next general election.

The offer to voters will effectively boost the disposable incomes of Malaysians and reduce household debts, the federal opposition has said.

Rafizi (picture, right) said today that excise duties are now imposed on all local or foreign makes.

“‘If excise tax is abolished... what doesn’t change is the price advantage, what changes is the tax,” he said at a press conference.

He said Proton and Perodua will remain the cheapest cars in the market after the tax cut.

Malay rights group Perkasa had voiced its concern that PR’s move will cause Proton’s sales to drop and also cause Proton employees to lose their jobs.

Malaysians pay inordinately high prices for cars mainly because of the protection afforded to national carmaker Proton since 1984.

The public pays import, excise and sales taxes that translate into some of the highest car prices in the region.
A recent income survey found that a household earning RM3,000 a month could spend up to 50 per cent of its income on maintaining a car.

A cut in car duties — which currently run as high as 105 per cent — could help stimulate the economy by boosting disposable income and reducing household debt burden, analysts have also told The Malaysian Insider.

The high taxes now have resulted in about 20 per cent of the RM581 billion total household debt in the country last year being held in cars, an asset that depreciates over time.

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