ALOR SETAR, The government’s proposal to cap vehicle tax exemptions in Langkawi and Labuan to vehicles priced at RM300,000 and below starting Jan 1, 2026, has been welcomed by locals and consumer groups as a timely step to curb tax leakages.
Residents said the move would help prevent abuse of the existing policy, where some individuals had exploited loopholes to avoid paying taxes on luxury vehicles.
Kedah Consumers Association president Mohd Yusrizal Yusoff said the proposal to limit vehicle tax exemption in Langkawi and Labuan to vehicles priced at RM300,000 and below could help reduce leakages in luxury vehicle taxes, thereby generating additional revenue for the government.
“It’s a fair decision that ensures only eligible buyers benefit from the exemption. Those who can afford luxury cars should pay their taxes, as the revenue is needed for the people’s benefit,” said Nur Amalina Azman, 35, from Kampung Ulu Melaka, Langkawi.
Kedah Consumers Association (Cake) president Mohd Yusrizal Yusoff said the measure would help plug leakages in luxury vehicle taxes and boost government revenue.
“This policy is timely, as some had been exploiting the current exemption to avoid paying duties on luxury cars. It will also benefit tourism operators in Langkawi who rely on affordable vehicles for rental services,” he said.
Car rental operator Azmi Ashaari, 51, said the policy would not affect most local businesses since their vehicles are already priced below RM300,000.
Prime Minister Datuk Seri Anwar Ibrahim, when tabling Budget 2026 last Friday, said the exemption limit aims to prevent misuse of tax privileges in Langkawi and Labuan.
Anwar, who is also the finance minister, said the revised policy is part of efforts under the Belanjawan Madani Keempat: Belanjawan Rakyat (Fourth Madani Budget: A Budget for the People) to promote fair and responsible tax practices.
