Gov't lost RM4.8bil revenue through SST exemption, will lose RM2.5 billion more with another extension – paultan.org
The sales and service tax (SST) exemption for new car purchases, introduced in June 2020 to shore up the economy in the wake of the COVID-19 pandemic, has certainly been beneficial for car buyers. But it has truly hurt the nation’s coffers, with Bernama reporting that the government lost a whopping RM4.8 billion in revenue over the last two years.
Finance minister Tengku Datuk Seri Zafrul Abdul Aziz said the ministry is currently studying the impact of the SST rebates – the deadline of which has been extended three times and is set to end in less than two weeks – and is currently weighing its options. “The RM4.8 billion revenue forgone is a huge amount, which could have been channelled to help the people.
“We need to thoroughly study the matter. If we decide to extend for another three months, we would lose at least RM1.2 billion and if we were to extend for another six months, we would lose about RM2.5 billion,” he told the media in Labuan yesterday. Zafrul added that the government needs more revenue to provide subsidies to those in need to curb inflation.
Originally slated to end on December 31, 2020, the exemption – 100% for locally-assembled CKD models, 50% for fully-imported CBU cars – was extended at the last minute to June 30, 2021. The deadline was pushed back another six months in May; the current expiry date was announced during the tabling of Budget 2022 in October.
The ministry is under pressure from car companies to extend the rebates yet again, as the backlog of orders continue to mount. The industry is struggling to build enough cars to meet demand due to the global semiconductor shortage and parts supply issues.
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