Honda price increase doesn't affect car industry – no change in excise duty rates, says finance ministry
The ministry of finance (MoF) says that the increase in the price of new Honda vehicles that was announced last week does not affect the current situation in the country’s automotive industry, Bernama reports.
It said via a statement that the government has always ensured that tax policies imposed on the locally-assembled or completely knocked-down (CKD) vehicle production industry will not impede business growth or increase the market price of CKD vehicles.
“The people will benefit directly from the tax incentive enjoyed by CKD vehicle producers through competitive sale prices and indirectly benefit from the economic opportunities created, in line with the government’s aspiration under the National Automotive Policy (NAP) 2020,” the ministry said in the statement, which was issued on Sunday.
“It is imperative that companies comply with the audit review and adhere to the existing duty/tax exemption policy and incentive so as not to raise any issue, and act fairly to all companies that abide by the same basis and use the right criteria,” the statement read.
The government emphasised that there is no change in the excise duty or customised incentive exemption policy under the Industrial Linkage Program (ILP), and that impacting Honda does not affect the entire automotive industry.
It said that the Automotive Business Development Committee (ABDC), as the party that evaluates and recommends incentive approval for companies, is still using the same assessment method without any changes. “Hence, the excise duty exemption rate enjoyed by Honda at this time is reasonable and corresponds with the actual level of localisation achieved by the company,” the ministry said.
The MoF issued the statement following the announcement made last Friday by Honda Malaysia, in which the company said that there was a 5.3% to 9.25% increase in the selling price of some of its models and variants. According to Honda, it made the price increase after a review of the customised incentives for its CKD vehicle production, and following the audit, increased its compliance with duty/tax exemption incentives on its CKD vehicles.
As mentioned earlier, it is important to note that the adjustment is not as a result of any increase in duties, and does not affect the entire industry, with no other brands expected to announce any increase in pricing.
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