MAA urges govt to expedite decision on on revised OMV excise duties
KUALA LUMPUR: The Malaysian Automotive Association (MAA) has urged the government to expedite its decision-making and communication about the implementation of the new excise tax regulations under the PU(A) 402/2019 - Excise Tax Regulations (Determination of Value of Locally Manufactured Goods for Excise Duty) Regulations.
MAA president Mohd Shamsor Mohd Zain said that delays and ambiguity in the decision-making process regarding the revised open market value (OMV) excise duties could result in car prices increasing by up to 30 per cent.
He noted that the industry is still waiting for formal details on how the new method of calculating import and excise duties will be implemented from January 2026.
"Definitely, we will have an engagement with the government on this, and hopefully we will be able to look into it as soon as possible. The next five months are a very short time for any production-related response.
"When we talk about supply chains, it involves the entire logistics impact and more. We need at least six months, at a minimum, to adapt to any changes. So, we hope to receive updates on the next steps as soon as possible,' he said.
Mohd Shamsor said this after the Review of Motor Traders and Manufacturers' Performance for the First Half of 2025 event held here today.
He added that due to the requirements under PU(A) 402/2019, as well as relevant regulations and the Customs Act, the current formula needs to be revised to ensure it is fair and transparent.
Nonetheless, he believed that the Ministry of Finance (MOF) would look into the matter more proactively to minimise or ideally avoid any impact on the industry.
At the same time, Mohd Shamsor acknowledged that time is running short and that the roughly five-month window before the implementation of the reform does not provide sufficient time for manufacturers to respond, particularly in terms of the supply chain and logistics.
"We need at least six months to adapt to existing changes, so we hope to get an update on the next steps as soon as possible,' he reiterated.
In February, MOF denied media reports claiming that vehicle prices in Malaysia are expected to rise significantly from 2026 onwards, following the full implementation of the new excise tax regulation under PU(A) 402/2019.
The ministry had earlier clarified that the claim was inaccurate and explained that MOF, together with the Ministry of Investment, Trade and Industry, is reviewing the vehicle valuation method to ensure that taxes are imposed fairly, neutrally, and consistently. - Bernama
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