SST: What does it mean for you when buying a car? 

he Sales Service Tax (SST) is upon us as major car brands get into a mad rush to implement new prices for their products and services.  All new cars come with a 10% sales tax, while service and maintenance gets a 6% hike across the board.

The rational for SST isn’t really rocket science. Governed by the Sales Tax Act 2018 and the Service Tax Act 2018, the Sales Tax was a federal consumption tax imposed on a wide variety of goods while the Service Tax was levied on customers who consumed certain taxable services.

The effects of SST for car purchasers

 

Although the SST increment looks worrisome on paper, it doesn’t actually reflect the real-world ordeal. Car companies have up-the-ante to ensure car prices are lower even with SST. For example, Mazda Malaysia has announced that the company would absorb SST for a limited time to spur customer confidence and boost sales. Other major brands like Honda and Volkswagen have strived to keep prices reduced or near to pre-SST prices to ease the SST transitional period.

So what does it mean for you? SST shouldn’t be a deterrent to your decision to buy at any point because, if you’re well-versed with Malaysian political landscape, the Government needs to sustain a somewhat diminished country from further financial difficulties. That said, the SST period is transitional for most businesses, especially car companies. Savvy companies would find a way to get around it to give their valued customers positive and competitive pricing policies. This ultimately translates to a positive turnaround to cope with all the negative sentiments about SST. There are few industries exempted from SST, and the Sales tax is exempted on certain goods, class of person,  manufacturer of specific non-taxable goods, and registered manufacturer, with exemption of tax on the acquisition of raw materials, components, packaging to be used in manufacturing of taxable goods.

Now that you’re informed, do not let the negative sentiments about SST deter you from buying your dream ride at any point. Besides, there’s always an incredible campaign going on at your nearest car dealership.

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