A new tax and tariff structure for the auto industry is expected to be announced in August, Trade Minister Rafidah Aziz said today.

"I am told, August," Rafidah told reporters of the much-delayed policy for the sector.

Malaysia announced last year that from January 2005 it would cut import duties on cars from Southeast Asian countries in line with a regional trade pact but continue giving local producers rebates to minimise the impact.

Then in January it delayed implementation of that plan until June, pending a review of the tariff structure, on concerns that foreign companies might shelve new investments or even relocate current Malaysian operations.

Malaysia, which had won more time to comply with a regional trade liberalisation pact, had previously promised to cut tariffs on cars made by members of the Association of Southeast Asian Nations (Asean) to 20 percent this year and to five percent by 2008.

How much will it be?

The government, however, raised excise duty on cars and parts sold here to 40-250 percent from 30-100 percent last December, effectively nullifying any advantage from the tariff reduction for local consumers and foreign rivals of national car manufacturer Proton Holdings, which receives rebates.

"The question is how much the excise duty will be," Rafidah said.

"But surely from past experience, the government is not going to (impose) something that is going to cause havoc to the automotive industry. It's just to ensure that the government will not lose revenue," she said.

Rafidah also said Malaysia's economic growth forecast could be impacted by world oil prices, which are hovering around 60 dollars a barrel.

"If the economic performance requires that we are more conservative, we shall (review). It is on-going. When actual performance merits a downgrade or upward revision, we will do that," she said.

Prime Minister Abdullah Ahmad Badawi last month said spiralling oil prices may force the government to adjust its forecast.

Malaysia, a net oil producer, currently expects gross domestic product (GDP) to expand by five to six percent this year, down from 7.1 percent last year.