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Budget 2022: EVs in Malaysia to be completely tax free soon – zero import and excise duties, free road tax!

We’ve been waiting for the government to announce initiatives relating to electric vehicles for some time now, and during the tabling of Budget 2022 (Bajet 2022), we finally have a better idea of what they are.

During his official address in Parliament, finance minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said that the government sees the potential of EVs to help reduce air pollution. As such, to support the development of the local EV industry, the government is proposing that EVs be completely exempt from import duty, excise duty and sales tax.

If that isn’t enough, EVs will also benefit from a road tax exemption of up to 100% under the proposal, while an income tax relief of up to RM2,500 will be provided on the cost of purchasing and installing, renting or taking up hire purchase facilities, as well as subscription payments of EV charging facilities.

It should be noted that the initiatives being proposed today have been mentioned long before the tabling of Budget 2022, as Malaysia Automotive, Robotics and IoT Institute (MARii) CEO Datuk Madani Sahari said in April that a dedicated policy on EVs being drafted at the time would involve exactly what Tengku Zafrul announced. To recap, the Madani said the policy would provide new EVs with zero excise and import duties, along with full sales tax exemption and zero road tax.

As for the bit about income tax relief, this was brought up by international trade and industry minister Datuk Seri Azmin Ali earlier this month. At the time, the idea of providing income tax relief for both the purchase of EVs as well as for the installation of EV chargers was being considered, although as we just found out, it’s now only for EV chargers.

Of course, while these initiatives were mentioned in the past, they were not officially presented until today. Keep in mind that while what was mentioned today is certainly astonishing, this is still a proposal (for now) and the initiatives mentioned are not set in stone just yet. Nonetheless, it’s encouraging to see that the government is considering such steps in the first place to promote EVs here. What are your thoughts on the matter?

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