Malaysia wants EVs to be tax-free, duty-free to encourage consumers to buy

(Credit: Tesla)

Malaysian government officials are petitioning and working toward making electric vehicles exempt from taxes, including import and excise duties, as well as road taxes.

During his address to Parliament earlier this week, Malaysian finance minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz cited the reduction of pollutants and better air quality as the main indicators of why electric cars are a good idea. Environmental reasons seem to be the main driving force behind the argument that EVs should be exempt from numerous duties and taxes that are increasing the price of vehicles.

It will not be a minimal reduction in duties, either. According to Paultan, a Malaysian automotive news site, supporting politicians are proposing a 100% exemption from the road tax for EVs. Additionally, officials are proposing an income tax relief of up to 2,500 Malaysian Ringgits, or around $602. This figure would 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,” the report said.

Electric vehicle initiative programs have been discussed before now. In April, Malaysia Automotive, Robotics, and IoT Institute CEO Datuk Madani Sahari said that policies on EVs were being drafted, and included the proposals that Tengku Zafrul mentioned. Madani said in April that EVs brought into the market should be exempt from excise and import duties, along with a 100% removal of sales and road taxes on applicable vehicles.

Income tax relief proposals were mentioned during a meeting earlier in October by International Trade and Industry Minister Datuk Seri Azmin Ali. Income tax relief could prove extra incentives for consumers to purchase environmentally-friendly electric vehicles, along with a potential to begin setting up charging infrastructure for electric vehicles. It appears the income tax relief will only take effect if an EV charging point is purchased and installed.

The current market for electric vehicles in Malaysia is small. As of September 2020, only the Nissan LEAF, the Mini Electric, BMW i3, and Porsche Taycan were available for purchase. Each of these vehicles would qualify for an at least 20% reduction in price, if the incentives are approved, Paultan wrote.

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Malaysia wants EVs to be tax-free, duty-free to encourage consumers to buy
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