Govt To Develop Fair Formula To Calculate Open Market Value Of Local CKD Vehicles
PETALING JAYA, July 21 (Bernama) -- The government is developing a formula that is fair in calculating the open market value (OMV) or prices of locally assembled completely knocked down (CKD) vehicles in Malaysia.
The formula - the PU(A) 402/2019 - and the New Customised Incentive Mechanism (NCM) will not be applicable until the end of this year, Malaysian Automotive Association (MAA) president Mohd Shamsor Mohd Nor told a press conference here today.
According to a news report, the new formula is being developed after the enforcement was postponed to allow the government time to consult stakeholders, simplify the tax structure, and counter an expanding automotive trade deficit.
MAA president Mohd Shamsor Mohd Nor said the delay also has to do with the possibility in terms of the calculation or the method, and that needs a bit of time, noting that a single calculation method may not be suitable for every carmaker.
“We have different original equipment (OEs) or different ways of them (carmakers) running the business, where one's calculation will be a bit unsuitable. So, we will let the experts in the government come up with the formula, but we have been given a commitment that there will be little or no impact and at the same time, when it is confirmed, they will give us time to implement it,” he explained.
On the NCM, Mohd Shamsor said MAA had held several engagements with the Ministry of Investment, Trade and Industry (MITI) and its agencies, describing the discussions as positive and constructive.
He said the industry's continued engagement with the ministry had resulted in an additional six-month grace period for implementing the mechanism. "There will be further engagement, and we hope we will be able to reach a common ground where the industry can continue to operate sustainably while meeting the government's objectives for the overall automotive ecosystem," he added.
OMV refers to the estimated value of a vehicle before taxes and duties are imposed. It serves as the basis for calculating excise duty and ultimately influences the retail price of locally assembled vehicles in Malaysia.
It was reported that the older customised incentive framework was opaque and relied heavily on negotiations, and MITI is currently revamping the incentive into a simplified, rules-based system.
-- BERNAMA