Perkasa says no to tax cuts as public will opt for foreign cars
KUALA LUMPUR, July 26 — Perkasa is against Pakatan Rakyat’s (PR) proposal to slash excise duties on cars because it will lead to an outflow of funds as a result of the public’s preference for foreign makes.
The Malay rights group also said the federal opposition’s proposal showed they were poor managers of the economy and were only out to make “false promises”.
Malaysians pay inordinately high prices for cars mainly because of the protection afforded to national carmaker Proton since 1984.
The public pays import, excise and sales taxes that translate into some of the highest car prices in the region.
A recent income survey found that a household earning RM3,000 a month could spend up to 50 per cent of its income on maintaining a car.
Perkasa secretary-general Syed Hassan Syed Ali told The Malaysian Insider yesterday that the fate of Proton employees would also be put at risk because the prices of the national carmaker’s vehicles would be about the same as foreign cars.
“The people will be able to buy cars at a lower price, but how low?
“No one will want to buy Proton cars because the price of imported luxury cars will be about the same... (and) Proton employees will be upset (at) getting retrenched.
“This will see the country’s money flowing out because the people will be more interested to buy imported cars,” he said.
Syed Hassan said the proposal announced by PKR’s chief strategist Rafizi Ramli was just a strategy to fish for votes at the next general election.
“All these promises are attempts to get votes for GE13.
“All this while, we impose high taxes on buyers of imported cars to save the national car industry and stop the country’s money from flowing out... that’s the way to impose heavy taxes on those who are rich and who sometimes get away from paying income tax,” he said.
“This will happen when people who don’t know how to manage the economy lead the country,” he added, referring to the possibility that Proton’s sales would dip if the plan was carried out.
“AP (Approved Permit) car traders will smile but the government will suffer losses of hundreds of millions.”
In Malaysia, car traders who import cars need an AP licence.
On Tuesday, PKR’s Rafizi said PR would 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.
Rafizi had said 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.
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.
