SHOCK HIKE IN CAR PRICES: NAJIB U-TURNS ON PROMISE FOR CHEAPER CARS, EXCISE DUTY ON MPV & SUV RAISED BY 5%

KUALA LUMPUR― The Customs Department announced today that excise duty for multipurpose vehicles (MPV) and sports utility vehicles (SUV) have been hiked by 5 per cent since April 1.

On its website which has since been taken down for maintenance, the Customs said the duty for both types of vehicles with engine capacity up to 1.5 litres is now 65 per cent, but will not affect four-wheel drive vehicles whose duty is already the same rate.

“This will affect goods manufactured in Malaysia or imported into Malaysia,” it said.

The Excise Duty Order 2017 stated that the duty would be levied on manufacturers and importers. However, such increase would likely be passed down to customers leading to higher selling price for vehicles in those categories.

Among the vehicles affected would be two-wheel drive models such as Perodua Alza, Proton Ertiga, Toyota Avanza, Toyota Sienta, and Honda BR-V, Malay daily Utusan Malaysia reported today.

The daily also cited an unnamed source saying the Ministry for International Trade and Industry, and the Malaysian Automotive Institute have demanded an explanation over the increase from both the Customs and Finance Ministry.

It also reported that the hike was a result of a “confusion” from a new code system in categorising vehicles, causing the MPV category to “disappear”.

As a result, the Customs have elevated MPVs into the category of vehicles subject to 5 per cent increase in excise duty, the source said.

Umno-owned Utusan also reported that several marques have delayed announcing new prices for their affected models, due to uncertainties from the announcement.

The website of the Customs Department, down since midnight, is expected to be up after 6pm today.

Malay Mail Online is currently seeking verification from the department regarding the announcement.

MALAY MAIL