Anthony Loke Siew Fook
PUTRAJAYA: The government yesterday decided to abolish the Ad Valorem Registration Fee (AVRF) that was imposed on locally-made trailer and semi-trailer trucks, said Transport Minister Anthony Loke Siew Fook.
The AVRF abolition will be carried out in a two-month period to enable work to amend procedures and preparations for the Road Transport Department (JPJ) registration system to be properly done, he told a media conference here.
AVRF is a registration fee imposed on motor vehicles, with the amount calculated according to the value of components used in the manufacture of the vehicles concerned, and where the vehicles are exempted from import and excise duties.
Loke said the ministry had re-evaluated the implementation of AVRF and found several issues concerning a rise in the cost of doing business and an imbalanced environment for competition.
Loke said the imbalanced environment for competition was due to the fact that the locally-produced trucks have become more expensive than imported ones.
He said that based on existing regulations, vehicles exempted from import duty including locally-made vehicles will be imposed AVRF during registration and sales tax by the Malaysian Royal Customs Department.
For imported vehicles, AVRF was waived because they had been imposed import duty and sales tax, he said.
“However, Malaysia has now signed bilateral free trade agreements (FTAs) with several countries, including Japan, Pakistan, India, ASEAN, China and South Korea.
“Under these FTAs, trailer and semi-trailer (trucks) imported from the countries concerned are exempted from import duty,” he said.
Apart from this, sales tax exemption is also given to container trailer trucks bought from manufacturers licensed under the Sales Tax Act 1972.
“As such, all imported vehicles involved in the exemption of import duty and sales tax have generally been exempted from paying any fee including AVRF,” he said.
Loke said this has created an uneven playing field where manufacturers of locally-made vehicles are subjected to AVRF and sales tax.
Furthermore, manufacturers of local vehicles also have to compete with suppliers of new imported vehicles which have lower and more competitive cost elements, he said.
Loke said the fee abolition would also create a uniform business environment between Peninsular Malaysia and Sabah and Sarawak.
He said that at the moment only vehicle owners who import vehicles into Peninsular Malaysia from Sabah and Sarawak are exempted from AVRF.
“The standardisation of vehicle fee policy for trailers and semi-trailers built in Peninsular Malaysia, Sabah and Sarawak will ensure that vehicles built throughout Malaysia will enjoy the same privileges,” Loke said.
Asked on the quality of locally-produced vehicles, Loke expressed confidence that the local manufacturing industry with its 40 to 50 years of experience can compete with distributors of imported vehicles. — Bernama