Malaysia said on Wednesday it would cut import duty on cars made in fellow members of the Association of South East Asian Nations (Asean) to 5 percent from 15 percent, with effect from Thursday.
Excise duties for completely built-up cars from Asean countries would also be cut to between 75 and 125 percent, depending on engine capacity, from between 80 and 200 percent now, the government said in a statement.
The lower duties are part of the government's new automotive policy, and are in line with an agreement to phase out import duty on Asean-made cars by 2008 under a free-trade pact signed by the 10-member grouping.
Asean groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Import duty for completely built-up vehicles from non-Asean countries will stay at 30 percent.
Malaysia's auto trade body welcomed the move to cut the import duty. "It's a positive development," said Aishah Ahmad, president of the Malaysian Automotive Association. "It will encourage more exports to fellow Asean countries."
Asked how soon the new tax structure would be reflected in car prices, she said: "We are still computing the impact on car prices. It's too soon to tell." The government set a deadline of December 31, 2010 to abolish its approved permit (AP) system of importing cars.
The government said the new policy aimed to provide a clear and transparent direction for all industry participants, and "transform the local auto sector into one that is viable, competitive and resilient."
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