Slashing excise duties does not guarantee cheaper cars - Ministry

The abolishing of excise duties does not guarantee that the prices of cars will drop, according to the Deputy International Trade and Industry Minister Datuk Hamim Samuri.

“The government at this moment will not reduce the excise duties as a mechanism because that does not guarantee that the prices of car will drop,” said Hamim.

He said that slashing excise duties cannot be done drastically because car prices are determined by other factors such s manufacturing companies, the exchange rate, transportation costs, insurance and loan interests.

He added that the government stands to lose RM7billion a year in revenue if excise duty was done away with.

Hamim was responding to a question from Chua Tee Yong (BN-Labis) who asked the Government to reveal the date that it would reduce the duty rate of imported cars, so that the GE13 campaign promises can be fulfilled.

Hamim, stressing that the government was committed to the promise to reduce car prices between 20-30% within five years as stated in the BN manifesto, said that there the government was employer other mechanisms.

These mechanisms, he said, included discussing with companies to use several market strategies to reduce car prices such as using new variants, using locally made parts, and introducing promotion packages.

In a supplementary question, Rafizi Ramli (PKR-Pandan) said that the Ministry’s response was not comprehensive.

“It only depends on the government trying to convince these companies to reduce their prices, it does not involve market powers to affect the whole industry,” said Rafizi.

“There is no reason why the government can’t reduce excise duty when a 5% slash would only cost RM350 million a year which can bring big impact to the people, when RM250million can be given to a minister’s family to rare cows,” he said.