Another 6 Months Of No Price Hikes! Here’s The Latest On The CKD Tax Revision

The Ministry of Finance has quietly confirmed a new extension for the implementation of the P.U. (A) 402/2019 Excise Tax Regulations. Following an official letter sent to the Malaysian Automotive Association (MAA) on June 26, the deadline for the new OMV calculation method has been officially shifted to December 31, 2026.

For car buyers, this provides continued price stability and removes the immediate uncertainty that has surrounded the CKD market. Here is a quick breakdown of the latest timeline and why the industry is taking this extra time to get it right.

What is the "402" Regulation and the OMV?

To understand the drama, we have to look at the "OMV", or Open Market Value.

Currently, when a car is assembled in Malaysia (CKD), the excise tax is calculated based on its manufacturing costs. However, the P.U. (A) 402/2019 regulation, gazetted way back in 2019, proposes a new way to calculate this. It aims to include "non-manufacturing" costs into the value of the car, such as:

• Marketing and advertising expenses
• Administrative and sales costs
• Profit margins

If these were added to the tax calculation, industry players previously warned it could theoretically drive up the retail price of the car. This is where the infamous "30% hike" figure originated, an early estimate of what could happen if the new tax was implemented without any mitigation.

Why does the government keep delaying it?

Since 2020, the government has pushed the start date back repeatedly. Why? Because the automotive industry is complex.

Every car manufacturer (OEM) operates differently, some handle marketing in-house, others outsource it; some have different profit-reporting structures. In a recent phone call with paultan.org, MAA President Mohd Shamsor Mohd Zain reiterated that the extra six-month extension is meant to give the Ministry of Finance and the automotive industry the time they need to finalise the calculations so they are fair and provide a level playing field for everyone.

Will it actually affect your wallet?

The government has been very vocal about one thing: the 90% of Malaysians who buy B40 and M40-focused vehicles should not see a major impact.

Even as the new methodology is being "fine-tuned," the MAA has stated that once the final method is eventually agreed upon, the impact on pricing is expected to be "very little to none."

The Verdict?

For now, the "price hike" is a non-issue. The government is treating this with extreme caution because they don't want to disrupt the local automotive industry or make car ownership harder for the average Malaysian.

So, if you’re currently looking to buy a new car, you don’t need to rush into a decision based on tax rumors. The government has until the end of 2026 to get this right, and all signs point to a solution that keeps your next car well within reach.

Read: We're Lagging Behind! MAA Reminds MITI That Malaysia Is Already Losing The EV Race To Our SEA Neighbours