Throughout Price range 2024, it was introduced that service tax can be elevated from the 6% fee at current to eight% subsequent yr. It will begin from March 1, as indicated by the customs division just lately.

Exclusions to the brand new fee embody that for meals and beverage, telecommunication, provision of parking areas and logistics providers, however automobile servicing and repairs don’t fall below the exempted classes below the revision.

As such, the brand new 8% tax fee is about to be utilized to automobile servicing by way of labour expenses, however not the components used in the middle of servicing. It will doubtless lead to larger total automobile servicing prices when the brand new fee begins, as The Star studies.

Nonetheless, there was no official affirmation about this, and the Federation of Motor and Credit score Firms Affiliation of Malaysia (FMCCAM) trade gamers has referred to as on the federal government for readability on the matter.

Its president Datuk Tony Khor stated that whereas the brand new service tax fee wouldn’t straight have an effect on automobile costs, it might definitely have an effect on upkeep prices. “I assume the brand new tax fee can be relevant to automobile workshops too, though the federal government has not confirmed it,” he stated.

He added that any enhance may be important to second-hand automobile homeowners with a restricted finances. “I perceive that automobile upkeep bills might enhance however as homeowners, we additionally want to make sure automobile security and roadworthiness,” he stated. Khor stated the affiliation can be requesting the federal government to think about waiving the additional 2% hike on service tax for small workshops and people who drive second-hand automobiles.

Tax professional Datuk Koong Lin Loong echoed Khor’s views, saying that whereas automobile costs will not be prone to be affected, homeowners might want to fork out more cash for upkeep if the brand new fee is utilized.

“Automotive costs will solely be affected by (and modifications to) gross sales tax, import responsibility, excise responsibility and authorized permits. Nonetheless, car-related providers comparable to repairs and upkeep will contain a labour cost and the extra 2% tax,” he stated.

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