BN should do the right thing by abolishing car tax

The government must be more innovative and accommodative towards the sentiments and hardship of the people.

COMMENT

By P Gunaseelan
The Barisan Nasional government is in a position to remove the excise duty imposed on cars as the main reason for imposing high duties on cars 28 years ago was to protect the local automotive industry and not to increase revenue.

Most Malaysians are expecting that Prime Minister Najib Tun Razak will introduce tax reforms on cars in the budget to be tabled on Sept 28 to reduce the burden and hardship of the people.

The National Automotive Policy (NAP) was introduced on March 22, 2006 to facilitate the required transformation and optimal integration of the networks within the increasingly liberalised and competitive global environment.

After more than three years of its introduction, the NAP was reviewed in an intention to foster a more competitive market for local and international companies. The government also believed that the review can provide significant contribution to the overall growth of the industry and the country.

However is it high time now that the NAP is reformed to suit the needs and to eradicate the hardship and sufferings of people.

After Pakatan Rakyat’s promise to abolish PTPTN loans, PKR strategic director Rafizi Ramli has now said that Pakatan would abolish excise duty on cars which will drastically slash down car prices in the country. He added that this move was part of Pakatan’s election promises.

While the general public welcomes this move, politicians have expressed their concerns on this. In response, Umno Youth leader Khairy Jamaluddin dismissed the populist proposal and said that the idea would see Proton being at the losing end.

Perkasa president Ibrahim Ali also registered his concerns on this. Others have commented that the plan to slash duties and tax would send local car makers to grave.

However Rafizi claimed that under the proposal, Proton would still be among the cheapest cars in Malaysia and also quashed talks that the government would lose income as a result of removing the tax for cars.

He said a mechanism to make up for the loss of income will be formulated and announced by PKR de facto leader Anwar Ibrahim soon. He added this proposal would be included in Pakatan’s election manifesto and be used as a major campaign issue for the opposition during the 13th general election.

People are fed up with character assassinations and infighting in politics but they welcome this type of healthy competition in politics. And the people are not prepared to hear the same tune that the country would go bankrupt if the duties on cars were to be removed.

The government should be proactive and open to viable suggestions. It must be more innovative and accommodative towards the sentiments and hardship of the people.

Lessons from the Koreans
The BN-led government should be concerned that the disposable income of Malaysians has dropped tremendously.

If a person buys a car now, he has to pay 36 times of his monthly income which is very burdening. In other developed countries, people only pay 12 times of their monthly income for cars.

On the larger perspective, the public transport is not efficient at all. Owning a car is no longer a luxury but a necessity even to middle income groups with big families.

Malaysia is one of the few countries in the world where the banks practice giving long term loans up to the duration of nine years where middle income groups end up paying car loans for their lifetime.

Proton has not made much progress in penetrating the international market even though it has been spoon-fed by the government for the past 28 years. But the South Koreans who started to manufacture their own cars just some years before us have created history in the automobile industry.

The automobile industry in South Korea is currently the fifth largest in the world, measured by automobile unit production and the sixth largest by automobile export volume.

While its operation was merely the assembling of parts imported from Japan and the United States, South Korea is today among the most advanced automobile producing countries in the world.

Annual domestic output first exceeded one million units in 1988. In 1990, the industry manufactured numerous inhouse models, demonstrating not only its capabilities in terms of design, performance and technology but also signaling its coming of age.

Proton could not afford to be lethargic or sluggish anymore and the spoon-feeding by the government has to stop in the interest of the people.

Proton must come out with more proper and concerted efforts to compete in the global market.

The writer is the president of Malaysian Public Service Association and the editor of Nayagankini.com