KUALA LUMPUR, Nov 20 ― Putrajaya has said it is committed to lowering car prices within five years, after initially saying it will retain excise duties.

International Trade and Industry Deputy Minister Datuk Hamim Samuri was reported as telling the Dewan Rakyat today that imported cars, particularly those in the mid-range engine capacity, will be reduced by up to 30 per cent.

"The Government will keep its promise of reducing prices of imported cars between 20 per cent and 30 per cent within the next five years,” Hamim was quoted as saying by The Star.

The deputy minister was answering a supplementary question by Pandan PKR lawmaker Rafizi Ramli.

Hamim appeared to suggest that the government had never reneged on its promise to cut car prices down, and said Putrajaya was only delaying rolling out the policy for fear of the negative impact it would have had on the used car market.

"What will happen is that consumers will focus on getting new vehicles and will no longer want to buy second hand cars,” he was quoted as saying.

In January, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the government will not slash excise duties for vehicles as yet but may consider doing so when the country is in a better financial position.

Mustapa reasoned that Putrajaya was unable to cut the hefty tax burden imposed on car buyers now as this would eat into its profits, pointing out that excise duties amount to a whopping 75 per cent of the government’s total tax collection for vehicles.

Cutting car prices was among the key campaigning issue used by the opposition to shore up support in the run up to the 13th general election.

Rafizi claimed Malaysians, already coping with inflation triggered by subsidy cuts, were being squeezed by with exorbitantly high excise duties.

Car prices in Malaysia are among the highest in the world due to taxes.

Fearing a potential voter backlash as the opposition's campaign gained traction, the ruling Barisan Nasional government then pledged to slash car prices in its election manifesto.

After winning the polls, Putrajaya then said it has no plan to review the current vehicle excise duties, claiming the move would cut its revenue significantly.