Throughout Finances 2024, it was introduced that service tax might be elevated from the 6% price at current to eight% subsequent 12 months. This may begin from March 1, as indicated by the customs division not too long ago.

Exclusions to the brand new price embody that for meals and beverage, telecommunication, provision of parking areas and logistics companies, however car servicing and repairs don’t fall below the exempted classes below the revision.

As such, the brand new 8% tax price is ready to be utilized to car servicing by way of labour fees, however not the components used in the midst of servicing. This may doubtless lead to increased general car servicing prices when the brand new price begins, as The Star stories.

Nevertheless, there was no official affirmation about this, and the Federation of Motor and Credit score Corporations Affiliation of Malaysia (FMCCAM) business gamers has known as on the federal government for readability on the matter.

Its president Datuk Tony Khor mentioned that whereas the brand new service tax price wouldn’t immediately have an effect on automobile costs, it might actually have an effect on upkeep prices. “I suppose the brand new tax price might be relevant to automobile workshops too, though the federal government has not confirmed it,” he mentioned.

He added that any improve is likely to be vital to second-hand automobile house owners with a restricted funds. “I perceive that automobile upkeep bills could improve however as house owners, we additionally want to make sure car security and roadworthiness,” he mentioned. Khor mentioned the affiliation can be requesting the federal government to think about waiving the additional 2% hike on service tax for small workshops and people who drive second-hand automobiles.

Tax professional Datuk Koong Lin Loong echoed Khor’s views, saying that whereas automobile costs should not prone to be affected, house owners might want to fork out extra money for upkeep if the brand new price is utilized.

“Automobile costs will solely be affected by (and modifications to) gross sales tax, import responsibility, excise responsibility and permitted permits. Nevertheless, car-related companies similar to repairs and upkeep will contain a labour cost and the extra 2% tax,” he mentioned.

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