In Cars, Local News / By Danny Tan / 7 April 2017 6:27 pm / 183 comments

The affordable MPV segment is one that’s attracting plenty of interest, thanks to the January launch of the Honda BR-V, which has shot Honda to the top of a segment it previously wasn’t present in. The SUV-styled seven-seater enters a market that has the Toyota Sienta, Toyota Avanza and Nissan Grand Livina. Further down the price scale, local options include the Perodua Alza and the Proton Ertiga, launched last year.

All the above bar the 1.6L Nissan have four-cylinder engines below 1,500 cc, and attract excise duty of 60%. That has now been increased by 5% to 65%, according to the “Excise Duties Order 2017” published by the attorney general’s chambers on March 31. This fresh order replaces the 2012 version and takes effect from April 1, 2017.

Unlike import tax, excise duty is levied on all products, whether imported or manufactured locally. This means that the Honda BR-V, Toyota Sienta, Toyota Avanza, Perodua Alza and Proton Ertiga are affected by this move. Alcohol and cigarettes too, if you’re wondering about the increase in “sin tax”.

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The Nissan Grand Livina already attracts the 65% rate due to its 1.6L engine, which falls under the 1,500 to 1,800 cc category. By the way, a 1.5L sedan attracts 75% excise duty, so the new rate for budget MPVs is still lower than the average City or Vios.

There have been no announcements from the affected car manufacturers yet, but this points to an imminent price increase. We’ll keep tabs, but it’s wise to “lock in” your purchase before any revision. Compare prices and specs of the applicable models on CarBase.my.

The government, via the ministry of international trade and industry, has previously said that there are no plans to scrap excise duties. Import taxes have been on a downward trend, thanks to the many free trade agreements in place, but excise duty is the prerogative of the government.

“The auto sector is a very important contributor to the government’s coffers – 75% of the duties collected from the auto sector comes from excise duties,” MITI minister Datuk Seri Mustapa Mohamed said in 2014.

“On excise duties, the position of the government is as follows. Given the current situation of the budget, it is not possible for the government to review excise duties, but the government, of course, in the next few years, will review the fiscal situation. And as the fiscal situation improves, the government will consider looking into the possibility of gradually reducing excise duties,” he added then.

Based on that statement, as the economy is not rosier now than in 2014, there’s no possibility of excise duties going down from present rates. Up? Always a chance.