Road Tax Will Stay For Now - Government To Restudy Road Tax For All Vehicles

One main agenda on everyone's mouth this coming budget would surely be the proposal to reduce the rate of the Motor Vehicle Licence (LKM) commonly known as road tax. However based on Minister of Transport, YB Anthony Loke’s comment yesterday at parliament this would surely not be happening this time around.

According to him, this proposal, although would benefit the general public, would be detrimental to the country’s revenue collection. He further added, the Malaysian road tax collection contributes roughly RM3 Billion to the government coffers and is an extremely important source of income to the country.

However, Loke further added that the Ministry Of Transport (MOT) would restudy the overall fee structure and look at further improving the road tax collection system in the country. This is important nowadays truth be told as power-plants of motor vehicles are switching to smaller cubic-capacity especially in the luxury category where a Proton Persona pays the same road tax as a base model Mercedes C-class.

Now, as for the all important EV category,  for now there is no road tax charged till 2025. According to Loke, EVs road tax structure has to be inline with governments push towards growth of electric vehicle industry. Hence much study still needs to be done before any announcement of rates can be made. He also mentioned that there needs to be more incentives provided to EV to spur its adoption faster.

This revision of the EV road tax is something that we feel will make or break the EV adoption rate. This is because under the old EV road tax calculation, a run of the mill BYD Atto 3 owner would have to pay up RM900 in road tax payment annually.

Recently when the EV road tax calculation based on the “old” rates was published by a popular local website, there was a sudden rise in concern amongst EV buyers, in fact according to some of our sources, some buyers even cancel their purchase to wait for a concrete announcement on the road tax rates before commiting.