A lot of people; myself included, were jumping for joy when the govt announced last year that the tax exemption will be given to hybrid cars. We all know ridiculous taxes are levied on foreign cars in order to keep Proton competitive so this exemption, perhaps we can all own a good quality car and play a part in preserving the environment at the same time.
Many eyes were on the Honda Civic Hybrid, which I believe is the only hybrid model available in Malaysia the moment. The Civic Hybrid was priced at RM160,000, rather expensive if you were to ask me.
Alas, Honda announced the new price yesterday taking into consideration the tax exemption given by the govt. The new asking price is RM129,980.
But I am curious. Does this price truly reflect the exemption given by the govt?
Before I proceed, I would like to say that this is purely my own calculation based on simple mathematics.
If I am not wrong, the taxes levied on a completely-built-up (CBU) cars with engine capacity below 1,800 cc such as the Civic Hybrid prior to the exemption are as follows:-
Import duty – 5% (assumed CEPT, otherwise 30%)
Excise duty – 75%
Sales tax – 10%
Reference: Customs Act 1967 / Excise Act 1967
Hence, total taxes levied on the Civic Hybrid should be 90%. This simply means the original Civic Hybrid price of RM160,000 has been inflated by at least 90% due to taxes. With this, we can deduce the pre-tax cost price of the car using simple mathematics as follows:-
(160,000 / 190) * 100 = RM84,210
So the price of the car before being levied any taxes should be approximately RM84,000.
The govt announced that full exemption from import duty and 50% exemption from excise duty is given to hybrid cars for a period of 2 years. Following this, this taxes now levied on a hybrid cars should be as follows:-
Import duty – nil
Excise duty – 37.5%
Sales tax – 10%
Hence, the amount of taxes levied on a hybrid car after the exemption should be 47.5%. If that is the case, shouldn’t the new price of Civic Hybrid after the exemption be:-
RM84,000 + (47.5% * RM84,000) = RM123,900?
On the basis that profit has already been factored into the pre-tax price of RM84,000, what happened to the additional RM6,080 (RM129,980 – RM110,625) which was originally taxes but have now been exempted?
And, if the Civic Hybrid is not assembled within ASEAN thus making it falling into non-CEPT import duty rate of 30%, the pre-tax price of the car would actually be RM75,000 and post-tax exemption price of RM110,625 based on the formula above.
Of course, the above is based on my very limited knowledge and very simple minded mathematics. I could be wrong.
1 year ago… 2 true remarks
Many eyes were on the Honda Civic Hybrid, which I believe is the only hybrid model available in Malaysia the moment. The Civic Hybrid was priced at RM160,000, rather expensive if you were to ask me.Alas, Honda announced the new price yesterday taking into consideration the tax exemption given by the govt. The new asking price is RM129,980.
But I am curious. Does this price truly reflect the exemption given by the govt?
Before I proceed, I would like to say that this is purely my own calculation based on simple mathematics.
If I am not wrong, the taxes levied on a completely-built-up (CBU) cars with engine capacity below 1,800 cc such as the Civic Hybrid prior to the exemption are as follows:-
Import duty – 5% (assumed CEPT, otherwise 30%)
Excise duty – 75%
Sales tax – 10%
Reference: Customs Act 1967 / Excise Act 1967
Hence, total taxes levied on the Civic Hybrid should be 90%. This simply means the original Civic Hybrid price of RM160,000 has been inflated by at least 90% due to taxes. With this, we can deduce the pre-tax cost price of the car using simple mathematics as follows:-
(160,000 / 190) * 100 = RM84,210
So the price of the car before being levied any taxes should be approximately RM84,000.
The govt announced that full exemption from import duty and 50% exemption from excise duty is given to hybrid cars for a period of 2 years. Following this, this taxes now levied on a hybrid cars should be as follows:-
Import duty – nilExcise duty – 37.5%
Sales tax – 10%
Hence, the amount of taxes levied on a hybrid car after the exemption should be 47.5%. If that is the case, shouldn’t the new price of Civic Hybrid after the exemption be:-
RM84,000 + (47.5% * RM84,000) = RM123,900?
On the basis that profit has already been factored into the pre-tax price of RM84,000, what happened to the additional RM6,080 (RM129,980 – RM110,625) which was originally taxes but have now been exempted?
And, if the Civic Hybrid is not assembled within ASEAN thus making it falling into non-CEPT import duty rate of 30%, the pre-tax price of the car would actually be RM75,000 and post-tax exemption price of RM110,625 based on the formula above.
Of course, the above is based on my very limited knowledge and very simple minded mathematics. I could be wrong.
1 year ago… 2 true remarks
12 comments:
Possible just research the price of a comparably-spec'ed Honda Civic Hybrid sold elsewhere (USA, I think) and convert, for further comparison? USA has other charges tacked on as well, eg destination charge and also sales tax as high as 13% in some states.
In other words, assuming everything else except taxes, remains constant; that is, assuming the cost of production does not go up because Honda had to shut down plants, assuming also that the price of APs have not budged because one lucky bastard gets to import those hybrids. Damn those APs! Suggestion for your next post: If APs were eliminated, the Honda Hybrid woulda cost RM80k on the road.
We all know that buying a car in Malaysia is damn expensive. RM160,000 for a any car is too expensive, I cannot afford that much to be environmental friendly. Perhaps you can do a little bit of survey on Honda Civic Hybrid price in other countries and make comparison here.
I think it is because they want to make the price of the civic hybrid highest amongst all the civic choices. If not then no one will want to buy the normal civic when they have the choice to buy hybrid at a lower price
I did think about the Hybrid and its 'actual' costs with maintenance included. First thing I found out is that if the battery conks out, a replacement is VERY DARN expensive. Other issue is - are there any qualified mechanics in the country who can properly service or carry out maintenance of the car?
As for the price... I don't think its as simple as adding the up the reduction % and multiplying against the 'sale' price. It probably is the amount of the subjected category tax/levy has been reduced by %. If someone out there knows how the breakdown is, pls let me know. :)
the 1st hybrid car in malaysia is a Toyota Prius, Honda is later. USM bought 2 for R&D few years back with a hevy tag of >200k each~
I believe those hybrid are not sold under normal dealership, they are make to special order.
hah! well no surprise though right? =P
i still dunno y fb will cause someone to lose his job..enlighten me pls..
Hmmsd - well, nothing compared to malaysia.
taxy - well, based on what we discussed today, there are actually other factors too!
jam - well, what we can do is to force the price down... somehow... dunno how :)
leyaw - i think you are right. they wanna keep the price of civic within the range.
pinknpurlelizard - i was just told today that a civic's cost is around 50k... from a former staff. how about that?
-=Sin=- - well, maybe they should bring in the prius too. it's all over london.
huei - damn right...
neno - mail me and i will tell u.
I really have no idea how they calculate it, but in any case, cars are just too expensive and not worth buying! But still need a car - it's a necessity! Btw, I like the latest Honda City : )
I was informed that Honda brought in the original hybrid at a loss. The intent for the car was only as a showpiece to show to malaysia that they too have the eco-friendly tech. But was sure not many will buy it. Honda was surprised when the Govt reduce the tax and Honda then stop bringing in the Hybrid until this price adjustment.
I still think it is a matter of personal conviction whether one buys a eco-friendly car since if one were to calculate from $$ saved, it would take 20-30 years of driving before making back the cost difference to the 1.8 Civic.
joshua - really? hmmm... i was told they make a big margin from cars. well, only God knows. i found out that hybrid will use petrol once you hit above 40kmh... no point buying.
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