Tax incentives to spur adoption of EVs


THE Malaysian Automotive Association (MAA) has welcomed the government’s tax incentives for electric vehicles (EVs) under Budget 2022, as well as the extension of the sales and services tax (SST) exemption on passenger vehicles for another six months.

“We are thankful for the incentives on EVs to encourage foreign investment and to increase sales of such vehicles in Malaysia,” MAA president Datuk Aishah Ahmad tells StarBizWeek.

“The extension of the SST exemption will help spur passenger vehicles’ sales to reach pre-Covid 19 automotive total industry volume (TIV),” she adds.

Under Budget 2022, to support the development of a domestic EV industry, the government has proposed to provide full exemptions on import and excise duties and sales tax, as well as road tax (up to 100%) for EVs.

Individual income tax relief of up to RM2,500 will also be given on the costs of buying, installing, leasing or repayments of EV charging facilities.

Also, the SST exemption, which is 100% for locally assembled or completely-knocked-down passenger vehicles and 50% for imported or completely-built-up passenger cars, has been extended till June 30, 2022.

Meanwhile, Proton Edar CEO Roslan Abdullah says the tax incentives for EVs will help raise the adoption of EVs and the proliferation of offerings.

“Proton has a planned roadmap towards introducing hybrid, plug-in hybrid vehicles and EVs – so perhaps this development can help to push our plans forward.

“There is still a long way to go, as the building of a charging infrastructure to help support larger numbers of EVs is a considerable obstacle that needs to be overcome,” says Roslan.

He also agrees that the extension of the SST exemption will help spur car sales and boost the economy in the first half of 2022.

“The automotive industry has been beset by production delays as a result of lockdowns and component shortages this year.

“By extending the period of the SST exemption, it gives our customers a chance to enjoy this benefit and doesn’t unfairly penalise them,” he adds.

BMW Group Malaysia managing director Hans de Visser says the EV tax incentives will not only increase uptake of EVs but also encourage further development of the EV infrastructure and ecosystem to drive smarter, low-carbon communities and cities in the country.

“We have always believed that the future is electric and we have been at the forefront of electrified mobility in Malaysia since 2015, when we introduced BMW i,” says de Visser.

He points out that as the country’s leading provider of premium electrified vehicles, the company has delivered over 21,000 electrified BMW and MINI cars in Malaysia.

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