Budget 2022: EV industry to get full exemption on duty

by HARIZAH KAMEL / graphic by TMR

TO support the local electric vehicles (EV) industry, the government plans to provide full exemption on import duty, excise duty and road tax for EV cars.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said road tax exemption of up to 100% is also given to the vehicles. 

In addition, individual income tax relief of up to RM2,500 is also given on the cost of purchase and installation, rental and hire purchase of facilities as well as payment of EV charging facility subscription fees.

“The government sees the potential of EV that have the characteristics of energy efficient vehicles as an effort to minimise vehicle smoke pollution into the air,” said Tengku Zafrul.

International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali told Dewan Rakyat previously that the strategies involved include offering incentive packages such as road tax exemption, income tax relief for the purchase of EVs, and income tax relief for installing EV charging stations.

“Malaysia takes the compare-and-offer approach by forming a comprehensive, clear and consistent policy to cover the entire EV industry supplies and provide incentives in the use of EV,” he told Dewan Rakyat yesterday.

Mohamed Azmin noted that Malaysia’s regional competitors only focus on incentives to original equipment manufacturers (OEM).

“Among incentives for OEMs include pioneer status, investment tax allowance, as well as import and excise duty exemption,” he said.

For Malaysia, the government has planned several initiatives aimed to boost EVs like the National Automotive Policy which underlines specific initiatives to strengthen the EV ecosystem.

“These include critical parts manufacturers, standard-setting, as well as encouraging research and development, commercialisation and innovation to develop local technologies,” he stated.