The government plans to extend individual income tax relief of up to RM2,500 on EV charging facility costs for four years.
PETALING JAYA: With the government’s push for the electric vehicle (EV) sector, experts believe the industry is set to take off, as efforts continue to boost the industry’s development locally and encourage wider acceptance of EV use.
Recognising the financial commitment that Malaysians would need to make in embracing EVs, the government plans to extend individual income tax relief of up to RM2,500 on EV charging facility costs for four years.
In addition, tax deductions for EV leasing costs have been extended, allowing companies to continue benefiting for an additional two years.
Earlier this year, the government announced that companies are eligible for a tax deduction on EV leases, with the maximum qualified amount capped at RM300,000, valid until Dec 31, 2025.
Industry experts expressed optimism about the developments.
Electric Vehicle Association of Malaysia president Datuk Dennis Chuah believes these efforts will eventually encourage consumers to transition from internal combustion engine vehicles to EVs.
“In comparison to neighbouring countries, I am confident our policies place us at the forefront in the context of EV adoption” he says.
These initiatives, coupled with tax exemptions for locally assembled EVs and the import of EV components until Dec 31, 2027, create a favourable environment for industry growth.
Additionally, the import and excise duty exemption for fully imported EVs, in effect until December 31, 2025, further supports the industry’s development.
Chuah believes that globally, governments are dedicated to reducing carbon footprints.
In Malaysia, where petrol is subsidised, he believes there is a strong emphasis on reducing its usage.
“With the increasing adoption of EVs, a decline in petrol consumption is anticipated. This, in turn, is expected to lead to a reduction in subsidies – a key strategy in the broader initiative to minimise carbon emissions,” he added.
Chuah pointed out that, presently, consumers have only a handful of EVs to choose from, emphasising the need for more options in electric vehicles.
However, he believes that with the initiatives announced by the government in Budget 2024, more automotive companies will enter the market to provide a more extensive range of electric vehicles.
Meanwhile, veteran automotive industry journalist Yamin Vong highlighted the significant growth in the EV market in Malaysia this year, where the number of EV models launched has surged from merely three in 2019 to an impressive 25, including EV commercial vans, in 2023.
“The introduction of new incentives for EVs is definitely a step in the right direction,” he says.
