Two associations representing car vendors have proposed that there should be no difference in the excise duty for vehicles classified as passenger car, multi-purpose vehicle (MPV) and sport utility vehicle (SUV).
This will benefit the government by way of higher income as the excise duties for MPVs and SUVs are lower than that for passenger car, according to the Proton Vendors Association (PVA) and Kelab Vendor Perodua (KVP).
“It will also be easier for the relevant authorities as the number of different groups for excise duty is reduced to one category,” they said in a joint memorandum for the Ministry of International Trade and Industry (MITI) annual dialogue.
“The rationalisation will also encourage the MPV and SUV assemblers to increase the local content so as to be more cost-competitive,” the associations said.
PVA and KVP proposed that the road tax for diesel and gasoline powered vehicles be streamlined as the price of diesel (non-subsidised) was similar to gasoline.
“Making road tax the same will promote use of improved diesel powered vehicles which are more fuel-efficient,” they said.
The associations called for incentives and all other support to be given to manufacturers to set up plants in Malaysia to promote the manufacturing of pick-ups, luxury cars of above 2,000cc or with selling price of RM175,000 per unit of higher, hybrid cars and other eco-friendly cars.
“By encouraging them to set up plants in Malaysia and coupled with the promotion to localise their parts, both the manufacturers of vehicles and component parts will benefit,” they said.
The associations also proposed that import duties be waived to help to reduce the cost of raw materials, thereby lowering the prices of parts and components supplied to motor vehicle manufacturers and assemblers.
According to them, there is currently a wide range of import duties for raw materials and parts imported for use by component part makers.
On approved permits (APs), both associations said it was important for the government to ensure the termination of APs by 2010 with no further extension.
“The government needs to continue supporting local automotive players. As such, it is hoped that incentives be granted to those that promote the localisation of component parts,” they said.
Among the new proposals put up by the two associations was that calling for large aluminium and steel producers to be invited to invest in Sarawak to produce the raw materials needed by the automotive industry.
Another proposal called for the removal of all import duties on all raw materials used for the automotive industry.
PVA and KVP said that incentives should be provided for major manufacturers of raw materials to invest in Malaysia.
The two associations also proposed the implementation of vehicle end of life policy as it has been proven to be successful in countries like Japan.