THE government has extended a number of tax exemptions that were introduced to incentivise electric vehicle (EV) uptake in the country.
They include a two-year extension of the excise duty and sales tax exemption for locally-assembled EVs until Dec 31, 2027.
The tax exemption for the import of EV components has also been extended to Dec 31, 2027.
On the other hand, the import and excise duty exemption for fully-imported EVs is extended to Dec 31, 2025.
These extensions were not mentioned during the tabling of the Malaysia Madani 2023 Budget by Prime Minister Datuk Seri Anwar Ibrahim but were instead listed in the Touchpoints report made available later.
The extensions are a much welcomed move as they carmakers additional time to introduce more models at competitive prices.
This also gives all stakeholders the assurance when it comes to stabilising cost budgeting and is a sign of the government's continued commitment towards EVs.
Some observers said only time would tell how these extensions would eventually result in more affordable EVs.
To that end, they also hoped that the government would eventually introduce and implement more robust legislation to address the affordability issue.
There is also the matter of infrastructure building that correlates with EV uptake growth. The opinion is that there are many industry pain points to iron out that only the government is capable of engaging and handling.
For example, there is no form of standardisation when it comes to payment at public charging stations, leading to concern that there will be a multitude of digital applications from the companies operating the EV charging infrastructure.
There are also no incentives or concrete reasons for drivers to switch to EVs beyond pricing and accessibility - a core concern if the government hopes to achieve net zero carbon emissions by 2050.
As it stands, these extensions are viewed as a first step towards increased EV adoption with a lot more room to be worked and improved on.
Other EV-related touchpoints listed include a full tax exemption for EV charging equipment manufacturers from 2023 to 2032, as well as a complete Investment Tax Allowance over a five-year period. Companies are entitled to a tax deduction should they rent EVs with a maximum qualified amount limited to no more than RM300,000.
Finally, it was mentioned that Gentari Sdn Bhd will be setting up 500 public EV charging stations nationwide while Tenaga Nasional Bhd will receive an allocation of RM90 million to install EV charging facilities at 70 locations.
The 2023 Budget Touchpoints can be found at https://budget.mof.gov.my/ms/