Another price hike seems inbound as the government has increased the General Sales Tax (GST) on cars with 1,400CC or larger engines from 18% to 25%.
Although, the prior notion suggested that some crossover SUVs with engines smaller than 1400CC may be exempt from this tax hike. Cognizant of that, the government specifically outlined in the official circular that all SUVs and crossovers are subject to 25% GST regardless of engine size.
The finance division proposed that GST be increased on non-essential items, which also include “luxury cars.” Although, the previous report couldn’t be corroborated as the decision was still “under consideration” at the time.
Previously, the government had increased GST on all cars from 17% to 18%, which prompted a wave of price hikes. After the tax hike from 18% to 25%, cars with 1400CC engines or larger will see another price hike soon.
Concurrently, the local currency has been devalued further, which will also likely increase the car manufacturing cost further. Given that and the huge tax increase, this price increase wave will be more devastating than ever.
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