No new taxes after car excise duty cut, says Pakatan

KUALA LUMPUR, July 27 — Pakatan Rakyat (PR) will not impose new taxes to compensate for any potential loss of revenue from its plan to shelve excise duties to lower the sticker price for cars if it takes power in the next general election.

PKR’s strategy director Rafizi Ramli had on Tuesday announced that the federal opposition intends to cut the triple tax on cars — import, excise and sales tax — if it wins the coming general election.

Today, Rafizi (picture)said that there will be “no introduction of new taxes”.

Instead, he said, a PR federal government would instead cut spending and also revamp the current Approved Permit (AP) system to make up for any losses.

“I think we can look at how we manage APs. APs now... to give riches buta-buta(blindly),” he said.

“If AP is managed well, there will be a source of wealth that can balance the loss of revenue from excise duty.”

However, he said, Opposition Leader Datuk Seri Anwar Ibrahim would only announce details of PR’s mechanism for the alternative source of revenue next week.

Rafizi had previously admitted that the government could lose RM8 billion in yearly revenue if car taxes are cut.

But the offer to voters will effectively boost the disposable incomes of Malaysians and reduce household debts.

Malaysians pay inordinately high prices for cars mainly because of the protection afforded to national carmaker Proton since 1984. 

The public pays import, excise and sales taxes that translate into some of the highest car prices in the region and the world. 

A recent income survey found that a household earning RM3,000 a month could spend up to 50 per cent of its income on maintaining a car.

A cut in car duties — which currently run as high as 105 per cent — could help stimulate the economy by boosting disposable income and reducing household debt burden, analysts have also told The Malaysian Insider.

The high taxes now have resulted in about 20 per cent of the RM581 billion total household debt in the country last year being held in cars, an asset that depreciates over time.