In Funds 2024, the Madani authorities introduced a 2% service tax enhance from 6% to eight%, and it’ll begin on March 1. Exemptions embody companies for meals and beverage, telecommunications, automobile parking and logistics; however count on to see the tax hike in areas akin to automobile servicing, which has labour costs.

It might be only a service tax enhance and never an total gross sales and repair tax (SST) hike, however automobile costs may go up as effectively, in tandem with the general price of doing enterprise. A minimum of that’s the case for the Sime Darby Group, reported by The Edge.

In line with group CEO Datuk Jeffri Salim Davidson, Sime Darby – which motors division is a distributor and/or supplier of manufacturers akin to BMW, BYD, Ford, Hyundai, Jaguar, Land Rover, MINI, Volvo and Porsche – is anticipated to extend automobile costs in Malaysia. Sime Darby additionally lately grew to become the majority shareholder of UMW Toyota Motor (Toyota and Lexus) and Perodua by way of a takeover of UMW.

In line with the report, Jeffri stated Sime Darby will deal with the tax price enhance, which might be relevant to all different automotive gamers as effectively, as a part of its price of doing enterprise. Nonetheless, the rise gained’t be a flat 2% as there are lots of elements concerned.

“In principle, sure [car prices will increase]. However the automobile worth is ready relying on competitors, so it gained’t precisely be 2%. After which now we have different elements that come into play. So, it’s troublesome to say precisely that automobile costs will go up by 2%,” he informed the media on Wednesday.

That is an instance of costs not directly affected by a seemingly unrelated tax, as the general price of doing enterprise will increase and firms search to keep up their margins. Talking of upper costs, there’s additionally the excessive worth items tax (HVGT) and gas subsidy rationalisation to ‘sit up for’ this yr.

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