Throughout Price range 2024, it was introduced that service tax will likely be elevated from the 6% charge at current to eight% subsequent yr. This can begin from March 1, as indicated by the customs division not too long ago.

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

As such, the brand new 8% tax charge is about to be utilized to car servicing when it comes to labour fees, however not the elements used in the middle of servicing. This can probably lead to increased total car servicing prices when the brand new charge 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) trade 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 charge wouldn’t immediately have an effect on automotive costs, it will definitely have an effect on upkeep prices. “I suppose the brand new tax charge will likely be relevant to automotive workshops too, though the federal government has not confirmed it,” he mentioned.

He added that any enhance may be important to second-hand automotive homeowners with a restricted finances. “I perceive that automotive upkeep bills might enhance however as homeowners, we additionally want to make sure car security and roadworthiness,” he mentioned. Khor mentioned the affiliation could be requesting the federal government to contemplate waiving the additional 2% hike on service tax for small workshops and people who drive second-hand vehicles.

Tax skilled Datuk Koong Lin Loong echoed Khor’s views, saying that whereas automotive costs are usually not prone to be affected, homeowners might want to fork out extra money for upkeep if the brand new charge is utilized.

“Automotive costs will solely be affected by (and modifications to) gross sales tax, import obligation, excise obligation and authorised permits. Nevertheless, car-related providers corresponding to repairs and upkeep will contain a labour cost and the extra 2% tax,” he mentioned.

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