Budget 2023: Proposed Extension Of EV Duty & Sales Tax - GTFS Raised To RM3 Billion

During the tabling of the 2023 Budget yesterday, Prime Minister Anwar Ibrahim somehow did not touch on any matter related to EV or the push for the expedited growth of the EV charging network.

He however did touch on the increment of the Green Technology Financing Scheme (GTFS) to RM3 Billion till 2025. Anwar also mentioned no increment to the Malaysian electricity tariff for private users and SME which pretty much guarantees that your EV charging rate would remain as it is for the time being.

However, it is understood that the Ministry Of Finance had later on published certain touch-point which seems were not mentioned in the 2023 Budget announcement. Pretty much our EV initiative at the moment is still based on what was announced back in Budget 2022 to spur multiple sectors such as the Low Carbon Mobility Blueprint (LCMB), EV Roadmap and National Automotive Policy (NAP) 2020.

In it, Malaysians are now enjoying full import duty exemption on components for locally assembled EV and full excise duty exemption and sales tax on completely knocked-down (CKD) EV till 31 Dec 2025. Furthermore there is also full import duty and excise exemption on all imported completely built-up (CBU) EV till this year end, 31 Dec 2023.

Now for the clincher, many sites are reporting the below details as the new EV initiative though was not announced in the Budget 2023 tabling which is quite baffling as this are good initiative that would gain the government positive points amongst the EV advocates. Furthermore if you look closer it is clearly stated “proposal” which brings us to believe that the below as if what the government would be looking into implementing further down the road.

Under the proposed tax incentives, we can look at full import duty exemption on components for locally assembled EV and full excise duty exemption and sales tax on completely knocked-down (CKD) EV extended to 31 Dec 2027. While full import duty and excise exemption would carry on with all imported completely built-up (CBU) EV till 31 Dec 2025. This extension would certainly help EV buyers' decision making processes as many are still waiting for newer brands and models that are rumoured to hit our shores throughout this year and next.