By Mohd Farhan Darwis
KUALA LUMPUR, July 25 — The Malay Vehicle Importers and Traders Association (Pekema) welcomed today Pakatan Rakyat’s (PR) electoral pledge to slash the hefty excise duties and taxes on cars seen as overprotective of the local automotive industry.
But Pekema president Datuk Zainuddin Abd Rahman said that he was sceptical the opposition pact will be able to live up to its promise in the run-up to key national polls due soon.
“I fully agree (with the idea) if they can do it... but the problem is they have yet to fulfil their previous promises. How can I trust them again?” he told The Malaysian Insider.
“Promises are cheap. No need to pay... if true they want to abolish the excise duty, abolish APs too... that’s fair,” he said, referring to the government’s existing system of granting Approved Permits for the importation of foreign-manufactured cars.
The limited APs are highly desired by car importers and according to Zainuddin, each permit is worth RM10,000 today.
But Zainuddin said he doubted PKR will be able to deliver its promise.
“If everything is abolished, made cheap, the country will have no income... where will the country get its revenue from?” he asked.
“I am not confident they can do it,” he added.
Yesterday, PKR chief strategist Rafizi Ramli said the three-party PR pact will revamp completely the National Automotive Policy (NAP), including slashing hefty excise duties and reducing the triple-tax burden imposed on cars here, should it win Putrajaya in the next elections.
The PKR leader told a press conference here that the plan, to be slotted into PR’s election manifesto, would be used as a major campaign issue for the federal opposition as it fights for federal power.
The offer to voters will effectively boost the disposable incomes of Malaysians and reduce household debt, he added.
Citing statistics from the Household Income and Basic Amenities Survey Report 2009, Rafizi noted a worrying trend showing that an individual earning about RM3,000 a month could spend up to 50 per cent of his income maintaining a car.
He noted that the study had shown that 53 per cent of Malaysians record household incomes of RM3,000 and below while 71.9 per cent own or use cars.
Rafizi admitted, however, that slashing excise duties would also cut government income by some RM8 billion but he pointed out that revenue could be earned through other means without the need to impose additional financial burdens on taxpayers.