In a recent announcement, the Minister of Transport, Anthony Loke, revealed ongoing refinements to Malaysia’s draft tax structure for electric vehicles (EVs). The Minister cited specific aspects of the current draft requiring improvement and emphasised the need for additional time to optimise rates for prospective EV buyers.
Loke assured existing EV owners that the review process would not impact their current tax benefits, stating, that there are some aspects that he is not satisfied with in the draft and would need reviewing.
According to Malaysia Gazette, the comprehensive draft will undergo evaluation by the EV Steering Committee before finalisation. Loke expressed his commitment to refining the draft for the benefit of prospective EV buyers, recognising the importance of a competitive tax structure to drive electric vehicle adoption in the country.
Earlier statements by Loke outlined plans for a more competitive road tax structure, known as Motor Vehicle License (LKM), tailored specifically for EVs. This initiative aligns with broader government efforts to promote eco-friendly transportation. However, Loke clarified that the proposed road tax structure would only take effect after 2025, coinciding with the conclusion of the current road tax exemption period for EVs.
In February of the previous year, Malaysia’s Ministry of Transport, through the Road Transport Department, had announced a full exemption of LKM fees for electric vehicles. This exemption, valid from January 1, 2022, to December 31, 2025, applies to EVs utilising battery or fuel cell technology. Notably, the exemption excludes hybrid vehicles with internal combustion engines running on petrol or diesel.
As Malaysia strives to encourage the transition to sustainable transportation, the refinement of the EV tax structure underscores the government’s commitment to balancing EV adoption incentives with fair taxation practices. The forthcoming adjustments are anticipated to create a more supportive environment for electric vehicles within the Malaysian automotive landscape.
