EV shift: What the Malaysian government is doing to promote EV shift

KUALA LUMPUR, July 9 — The Malaysian government has made the introduction of electric vehicles one of the key priorities in its National Energy Transition Roadmap (NETR).

To this end, the company aims for 15% of all cars sold to be electric by 2030, rising to 80% by 2050.

The Malaysian government is encouraging its citizens to choose battery-powered over petrol-powered vehicles for their next car purchase. Here’s how to do it.

Import and excise tax exemptions

While EV prices may seem high now, they are still lower than they would be if governments were imposing regular road taxes and customs duties. Completely Built-Up (CBU) EVs are exempt from all import and excise duties for four years, from 1 January 2022 to 31 December 2025.

Parts for locally assembled EVs are currently fully exempt from import duties for six years until December 31, 2027.

If assembled locally, EVs will also enjoy a full excise duty exemption and sales tax exemption for the same period of six years.

Road tax exemption

EV owners have been exempt from paying road tax since 2022 and will continue to enjoy this privilege until December 31, 2025.

In addition, when the exemption period ends in 2026, the tax rate will be reduced based on the EV’s power output.

Announcing the new structure, Transport Minister Anthony Loke said it would be 85 per cent cheaper than petrol-powered vehicles.

Subsidies for charging facilities

To encourage the growth of the EV charging network, the Malaysian government is offering individuals an annual income tax deduction of RM2,500 until 2027 on the installation, rental, purchase or subscription fees of EV charging equipment.

Electric bicycles too

The government is also offering tax rebates of up to RM2,400 to encourage individuals to adopt e-bikes.

However, this incentive has only been announced for the 2024 tax year and is only available to individuals with an annual income of RM120,000 or less.

Tax incentives for manufacturers

Companies investing in the assembly and manufacturing of Energy Efficient Vehicles (EEVs), including hybrid and electric vehicles, and parts for such vehicles, are eligible for the following incentives:

Pioneer Status Incentive Income Tax Exemption, which provides 70% or 100% exemption on statutory income for 5 or 10 years respectively.

An investment tax allowance equal to 60% or 100% of the income tax exemption is available for qualifying capital expenditure incurred within 5 or 10 years, respectively, from the date of the first qualifying capital expenditure. This allowance is deductible up to 100% of statutory income for each tax year.

Support for charging companies

Companies investing in green technology services related to EVs, such as the installation, maintenance and repair of EV charging equipment, EV infrastructure and charging stations, can enjoy a 70% tax exemption for three years from the start of their business.

You will also be eligible to receive a Green Investment Tax Credit (GITA) equivalent to 100 percent of your qualifying capital expenditure on green technology projects for a period of five years from the date on which you first incur the qualifying capital expenditure.


Leave a Comment