Finance Ministry explains why Penang govt’s Toyota fleet not tax-free

The Penang government recently changes its Toyota Camry fleet for state executive councillors, legislative assembly speaker and deputy, and other state officials. — Reuters pic
The Penang government recently changes its Toyota Camry fleet for state executive councillors, legislative assembly speaker and deputy, and other state officials. — Reuters pic

KUALA LUMPUR, Aug 27 — The Penang government is required to pay tax on its recent purchase of 15 Toyota Camry for its officials because the car make is foreign, the Finance Ministry said today.

It explained that it is the government’s policy to allow tax exemptions on only if the cars are made locally, otherwise known as Complete Knocked-down (CKD) vehicles.

“It is in line with the government policy which provides that government department vehicles can only be purchased through a local manufacturer or local assembly vehicles (CKDs) except if there are special needs,” the ministry said in a statement.

It said the previous Camry fleet used by the Penang government in 2013 were an example of CKD cars.

“Since these are models are no longer locally assembled, therefore the Toyota Camry which were recently purchased are not eligible for similar tax exemptions as before,” the ministry added.

It said Penang was not the only state government that was denied tax exemptions for its car fleet, pointing to Selangor, which applied for the same on November 28 last year and was rejected for the same reason.

“As for the Perak state government, the ministry did not receive any application for tax exemption on their purchases of CBU (Complete Built-Up) type Toyota Camry cars.

“Therefore the claim that the Perak State Government received tax exemption is not true,” the ministry said.

The Penang government recently changes its Toyota Camry fleet for state executive councillors, legislative assembly speaker and deputy, and other state officials to replace the existing cars of a similar model bought in 2013.

State finance officer Datuk Sarul Bahiyah Abu said the executive council approved the purchase on March 13, and added that there was no tax exemption for the cars.

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