SST exemption: MAA asking for extension due to order backlog from chip shortage, but unsure if will happen


The Malaysian Automotive Association (MAA) held a question-and-answer session after its annual general meeting today. One of the questions raised by members of the media was whether the government was considering extending the sales and service tax (SST) exemption, which is scheduled to end on June 30.

President Datuk Aishah Ahmad said that the organisation is in the midst of drafting an appeal letter to request for the extension from the ministry of finance, which will be sent after the AGM. “We have not submitted but we will soon,” she said. “The outcome, we do not know yet. We would like it to be extended but we really do not know whether the government will accept it or not. It really is up to the government.”

Aishah added that the ongoing global semiconductor shortage has hampered the car companies’ ability to fulfil the backlog of orders, necessitating the extension. “We will give our reasons for requesting for the extension, [which is] the microchip problems and all that. A lot of our members still cannot supply in terms of the orders they have received because of this microchip problem.”

The SST exemption has been extended three times since then-prime minister Tan Sri Muhyiddin Yassin announced it way back on June 5, 2020. Originally slated to end on December 31 that year, the deadline was then pushed back at the last moment to June 30, 2021. Another six-month extension was given in May, followed by a third one that was confirmed during the tabling of Budget 2022 in October.

Having gone through so many extensions, it’s unlikely the government will continue with the exemption, which is 100% for locally-assembled CKD models and 50% for full CBU imports. As such, if you’ve been on the fence on purchasing a new car, you should probably get it now (registrations must be completed by July 31 to be eligible) instead of waiting for yet another lifeline.

The post SST exemption: MAA asking for extension due to order backlog from chip shortage, but unsure if will happen appeared first on Paul Tan’s Automotive News.


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