PKR pledges open bidding for auto APs
UPDATED @ 02:17:26 PM 31-07-2012
PETALING JAYA, July 31 — PKR today suggested auctioning off Approved Permits (APs) for imported vehicles through an open bidding process in the first three years under Pakatan Rakyat's (PR) rule before abolishing the system entirely in 2015.
The party's strategy director Rafizi Ramli (picture) said this would be on top of PR's electoral pledge to slash excise duties and to help reduce household debt and boost the disposable incomes of Malaysians.
He told a press conference today that if an estimated 70,000 APs are awarded every year, the auction should fetch nearly RM3 billion in revenue annually for the government.
He said this would help compensate for the RM8 billion in annual losses expected from PR’s plan to slash car excise duties, which currently run as high as 105 per cent.
“Under Umno-Barisan Nasional (BN), the AP system only benefits those who are close to them.
“This is why PKR suggests that the next government, whether or not under BN or PR, must abolish the AP system by 2015 in order to comply by agreements of the World Trade Organisation (WTO) and the ASEAN Free Trade Area (AFTA),” he said.
Rafizi pointed out that under the country’s National Automotive Policy (NAP) in 2005, the AP system was supposed to be abolished by December 31, 2010, but was instead extended by five years to 2015.
He said Malaysians must be reminded of this, as the system was meant to help Bumiputera entrepreneurs to flourish in the automotive industry.
“In his Budget 2010 speech, (Prime Minister) Datuk Seri Najib Razak annnounced that every AP will be sold for RM10,000 and funds from them will be channelled to a special Bumiputera entrepreneur fund.”
Rafizi said that in 2011 alone, some 600,123 new cars were registered. Of that total, he said 533,515 units were manufactured and assembled in Malaysia, which meant that some 66,608 APs were issued for imported vehicles.
He said if APs were sold at RM10,000 each, the government should have spent RM666 million to help Bumiputera entrepreneurs from the fund.
“But until today, we still do not know what has happened to that fund or how funds from the sale of APs have been spent,” he said.
“This is why PKR suggests that the next government adheres to the commitment to abolish the AP system by 2015. But for the first three years from 2013 to 2015, necessary measures must be taken to ensure that we get the best value from the APs issued through this open auction,” he said.
Rafizi suggested that the opening bid for the auction of an AP should be set at RM10,000 for fuel-saving vehicles, RM20,000 for regular vehicles and RM30,000 for higher capacity vehicles.
He said with the estimated revenue from the auction, PR’s plan to reduce car prices by slashing excise duties would be easier to implement as it would compensate for the RM8 billion drop in government revenue.
“At the same time, our tax revenue from other means would also increase because when we return RM8 billion into the pockets of Malaysians, this would in turn be pumped back into the economy,” he pointed out.
PKR had last week promised not to impose new taxes to compensate for any potential loss of revenue from its plan to shelve excise duties to lower the sticker price of cars if it takes power in the next elections.
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 and the world.
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.
A cut in car duties — which currently run as high as 105 per cent — could help stimulate the economy by boosting disposable income and reducing household debt burden, analysts have also told The Malaysian Insider.
The high taxes now have resulted in about 20 per cent of the RM581 billion total household debt in the country last year being held in cars, an asset that depreciates over time.