Lower Car Import Duties in Malaysia of Little Benefit

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The agreement to remove import duty on cars imported from Australia and Japan is not expected to have much of an impact on the local market although a few new models may enter the market. It only impacts cars imported from Japan, and most Japanese cars are assembled here.

Imported cars are subject to three taxes:Import duty of around 30% and sales tax of 10%. The largest tax is excise duty which can run as high as 105% for cars above 2500cc. Import duty on parts of cars which are assembled here, called CKD (completely knocked down), runs at 10% versus the 30% on CBU (completely built up) cars.

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