Sunday, September 07, 2014

You Say Tomato, I Say Tomato ...

How long have we been calling for an abolishment of APs, still around I see ... and wait, they now came up with an Economic Cost Benefit Analysis ... OK, people, lets do an Economic CBA then.

IF ABOLISHED
a) cost government (Malaysian public) RM2.8bn in revenue
b) AP holders' corporate/individual tax, maybe RM200m, assuming they make only RM900m a year

IF ABOLISHED
a) car purchase savings RM2.8bn to Malaysian public
b) trickle down, multiplier effect from HAVING a lower car installment plan, more funds to meet other necessities or other loans, maybe buy a bigger and better property
c) more variety in cars that can be purchased by more Malaysians
d) DO NOT NEED TO PLONK DOWN LARGE FUNDS for reconditioned cars, which will clog the environment, result in much higher maintenance cost

The government MUST not view tax/fees collected as theirs', it belongs to the Malaysian public. So the argument here is moot. The government does not loses if the public benefits by the same quantum. You want to raise back RM2.8bn in revenue, go increase petrol RON 97 by another 15%-20%, you will be taxing people who can afford expensive cars.

As for business opportunities for Bumiputras, I think any person with some semblance of an economics degree will be able to tell you that the APs is a created industry out of thin air THAT yields no "real value" in terms of contribution to PRODUCTIVITY, SKILLS, CAPITAL MANAGEMENT, VALUE ADD to the real economy. I am all for encouraging business opportunities and skills development, but make sure its in areas where we are adding real value, such as oil & gas, private equity, academic scholarships, etc...

Pekema: Abolishing Aps Would Affect Government's Revenue

KUALA LUMPUR, Aug 29 (Bernama) -- The abolishment of approved permit (AP) for cars would not only give a negative impact to the Bumiputera entrepreneurs in the automotive industry, but could also affect the government's revenue through tax collection from the AP holders.

The Malay Vehicle Importers and Traders Association Malaysia (Pekema) president Datuk Zainuddin Abdul Rahman said the annual tax collected from members of the association amounted to over RM2 billion, eventhough the number of cars sold constituted only five per cent of the overall market.

"From the number of imports, the quantity that are brought in is not big however in terms of tax collection, our contribution is commendable. For example, in 2011 the government's import tax collected from our members totalled RM2.8 billion, and this increased to RM3.3 billion in 2012.

"This did not include the annual corporate and indvidual taxes. Moreover, the government receives new revenue from the fees of each AP for used cars of RM10,000 which now amounts to more than RM1 billion," he said in a statement in conjunction with Pekema's annual general meeting here Friday.

Zainuddin said the irony was that this was the only AP that the government had imposed a fee out of the more than 800 types of APs issued.

Early this month, the Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said the government is still studying the proposal to abolish the AP for the import of vehicles as it would affect the country's revenue.

He was reported as saying that whatever policy that would be introduced to replace the AP would be able to compensate the loss of government revenue.

Elaborating, Zainuddin said the criticism that the continuation of the open AP policy would be seen as the government taking a 'step backwards' was unfounded.

"The issue of 'going backwards' do not arise as the open AP policy has succeeded in ensuring the participation of Bumiputera entrepreneurs in the automotive industry. This is one of the government's affirmative action in the implementation of the New Economic Policy," he said.

In this regard, Zainuddin said Pekema was thankful to the government for considering the problems that could be encountered by the AP holders, especially its members.

"Pekema has consistently said that the huge implication on Bumiputera entrepreneurs if the open AP policy is abolished is that it would kill the Bumiputera participation in the nation's automotive industry...if the proposal is adopted," he added.

-- BERNAMA


Abolishing  approved permits (AP) for cars would not only have a negative impact on Bumiputera entrepreneurs in the automotive industry, but could also affect government revenues, said an industry player today.
Malay Vehicle Importers and Traders Association Malaysia (Pekema) president Datuk Zainuddin Abdul Rahman said the annual tax collected from members of the association amounted to more RM2 billion, even though the number of cars sold constituted only 5% of the overall market.
"The number of cars brought in is not big, however, in terms of tax collection, our contribution is commendable. For example, in 2011 the government collected almost RM2.8 billion from our members and this increased to RM3.3 billion in 2012.

"This excludes annual corporate and individual taxes. Moreover, the government also derives revenue from the fees of each AP for used cars of RM10,000 which now amounts to more than RM1 billion," he said in a statement in conjunction with Pekema's annual general meeting today. Zainuddin said the irony was vehicle AP was the only one hit by a fee out of the more than 800 types of AP issued.
Early this month, the Minister of International Trade and Industry Datuk Seri Mustapa Mohamed (pic) said the government was still studying the proposal to abolish AP for the import of vehicles as it would affect the country's revenue.
He was reported as saying that whatever policy that would be introduced to replace the AP must be able to compensate the loss of government revenue.
Zainuddin said criticism that an open AP policy meant the government was taking a “step backwards” was unfounded.
“The open AP policy has succeeded in ensuring the participation of Bumiputera entrepreneurs in the automotive industry. This is one of the government's affirmative actions in the implementation of the New Economic Policy."  – Bernama, August 29, 2014.
- See more at: http://www.themalaysianinsider.com/malaysia/article/government-will-lose-rm2-billion-if-aps-abolished-says-pekema-bernama#sthash.l65Szmul.dpuf
Abolishing  approved permits (AP) for cars would not only have a negative impact on Bumiputera entrepreneurs in the automotive industry, but could also affect government revenues, said an industry player today.
Malay Vehicle Importers and Traders Association Malaysia (Pekema) president Datuk Zainuddin Abdul Rahman said the annual tax collected from members of the association amounted to more RM2 billion, even though the number of cars sold constituted only 5% of the overall market.
"The number of cars brought in is not big, however, in terms of tax collection, our contribution is commendable. For example, in 2011 the government collected almost RM2.8 billion from our members and this increased to RM3.3 billion in 2012.
- See more at: http://www.themalaysianinsider.com/malaysia/article/government-will-lose-rm2-billion-if-aps-abolished-says-pekema-bernama#sthash.T8vFcsVz.dpuf
Abolishing  approved permits (AP) for cars would not only have a negative impact on Bumiputera entrepreneurs in the automotive industry, but could also affect government revenues, said an industry player today.
Malay Vehicle Importers and Traders Association Malaysia (Pekema) president Datuk Zainuddin Abdul Rahman said the annual tax collected from members of the association amounted to more RM2 billion, even though the number of cars sold constituted only 5% of the overall market.
"The number of cars brought in is not big, however, in terms of tax collection, our contribution is commendable. For example, in 2011 the government collected almost RM2.8 billion from our members and this increased to RM3.3 billion in 2012.
- See more at: http://www.themalaysianinsider.com/malaysia/article/government-will-lose-rm2-billion-if-aps-abolished-says-pekema-bernama#sthash.T8vFcsVz.dpuf

3 comments:

Kelly Chen said...

Abolishing Aps Would Affect Government's Revenue + Politicians' income

clk said...

Raise revenue? Create a COE like in S'pore, Govt to consumer directly...bypass the middle man!

clearwater said...

Allowing a selective few to be perennial parasites on the imported car buying public and calling it affirmative action in furtherance of NEP objectives must be the sickest joke of 2014. APs are licences to squeeze.