Finance Ministry says vehicle valuation review under way, no decision yet on 2026 price hike

KUALA LUMPUR: The Finance Ministry, together with the Investment, Trade, and Industry Ministry and the automotive industry, is reviewing the vehicle valuation method to ensure that tax is imposed fairly, neutrally, and consistently.

Regarding reports about a significant increase in vehicle prices expected in 2026 due to new excise tax regulations under PU(A) 402/2019-Excise Tax Regulations (Determination of Value of Locally Produced Goods for Excise Tax Purposes, the Finance Ministry clarified that these reports are inaccurate.

"There has yet to be a final decision.

"The Finance Ministry, together with Investment, Trade and Industry Ministry and the automotive industry, is currently reviewing the vehicle valuation method to ensure that the imposition of tax is carried out in a fair, neutral, and consistent manner,” it said in a brief statement today.

A local financial portal recently reported, citing industry sources, that the automotive industry has secured another extension on the proposed revision of excise duty for locally assembled (completely knocked down) cars until Dec 31 this year.

Despite the current respite, however, there will likely be no further extensions from 2026, which suggests that prices are likely to increase significantly from 2026, it said.

Meanwhile, a local automotive online portal reported that the Malaysian Automotive Association confirmed that the open market value (OMV) excise duty revision will be deferred to January 2026.

"The postponement of the revised OMV excise duties is only for a year, and if implemented, it could lead to a price increase of between 10% and 30%,” it reported in January this year.