The Ministry of Finance has announced that the implementation of the P.U.(A) 402/2019 Excise Tax Regulation (Determination of Value of Locally Produced Goods for Excise Tax Purposes), or more commonly referred to as the open market value (OMV) excise tax revision, will be deferred again.
In a letter sent to the Malaysian Automotive Association (MAA) dated December 23, 2025, the Ministry said that the excise tax on cost of sale, general expenses and administration, as well as profit on locally assembled (CKD) cars will be temporarily waived until June 30, 2026. And as such, prices for these vehicles are also expected to remain until then.
The amendment, passed by then-Finance Minister Lim Guan Eng, is part of the Malaysian Customs efforts to align its tax regulations with the World Customs Organisation (WCO). However, since the regulations were gazetted in 2019, its implementation has been deferred for four times prior to the latest postponement.
The P.U.(A) 402/2019 regulations effectively changes the method used to determine the OMV – the value upon which excise tax will be levied – for CKD vehicles. With the new amendment, non-manufacturing costs, such as marketing expenses, and profits, will now be included into the OMV calculation, which was previously based solely on manufacturing-related costs.
As such, the MAA estimates that CKD car prices would be increased by at least 10% with the new tax regulations.
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The Ministry did not disclose the reasons for the latest deferment, however it is likely that the mechanism for implementation has yet to be finalised. The lack of clarity in regulations, however, could impact carmakers’ product and operations planning, and thus result in more reserved approaches when it comes to investments for local assembly here in Malaysia.
Of course, if the price hike as a result of the new OMV tax regulations result in a minimised price difference between imported and CKD cars, camakers could potentially even choose not to invest in local assembly operations at all.
Nevertheless, MAA says that the Ministry continues to be committed to promoting local production and investment, and as such will work to reduce the OMV regulations’ impact on pricing and vehicle sales in the country.
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