The implementation of the controversial OMV excise duty revision has been deferred to January 2026, offering a temporary reprieve for car buyers and the automotive industry. The regulations, which aim to recalculate the open market value of CKD vehicles, were originally slated for 2020 but have been repeatedly delayed due to industry concerns over potential price increases. This latest deferment buys time for stakeholders to engage with the government and seek alternative solutions, but the long-term impact of the revised OMV remains uncertain.
The implementation of the Excise (Determination of Value of Locally Manufactured Goods for the Purpose of Levying Excise Duty ) Regulations 2019, commonly known as the OMV excise duty revision, has been deferred once again, this time to January 2026. This means a one-year reprieve for car buyers and the Malaysian automotive industry.
The regulations, which were originally scheduled to come into force in 2020, were controversial due to their proposed methodology for calculating the open market value (OMV) of a CKD vehicle. The new system would have taken into account not just the manufacturing costs but also expenses related to sales, such as engineering, design work, and royalty payments. This, industry players argued, would significantly inflate the OMV and subsequently lead to a hefty price increase of up to 30% for CKD cars.The Malaysian Automotive Association (MAA) president, Mohd Shamsor Mohd Zain, confirmed the deferment and expressed the association's concern about the potential impact of the revised OMV on the industry. He stated that a price increase of 10% to 30% would have a ripple effect, leading to lower sales, reduced volume, especially for CKD vehicles, and a negative impact on local suppliers. The MAA is actively engaging with the government to seek alternative solutions and mitigate the consequences.This latest deferment provides some much-needed breathing space for the automotive sector, but the uncertainty surrounding the implementation of the revised OMV remains a concern. Carmakers and consumers alike need clarity on the future of the regulations to make informed decisions about investments and purchases. The annual deferment only exacerbates the uncertainty and hinders long-term planning. The government needs to address this situation decisively and either implement a more feasible OMV calculation system or provide a clear timeline for the eventual implementation of the 2019 regulations. Otherwise, the Malaysian automotive industry risks losing out on local production and investment, with potential long-term consequences for the economy
OMV Excise Duty CKD Cars Price Hike Malaysian Automotive Association (MAA) Automotive Industry Open Market Value (OMV)
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