Malaysia’s revised Budget 2023 (Bajet 2023) is presently being tabled by finance minister and prime minister Datuk Seri Anwar Ibrahim in parliament. As with previous editions, we will be monitoring his speech for any automotive- and transport-related matters.
The original tabling of Budget 2023 by the previous administration in October 2022 brought the announcement that fully-imported (CBU) electric vehicles would be exempt from import and excise duties until December 31, 2024, an extension of a year from the previous end date of December 31, 2023.
More EV incentives could be announced today, given the broad hints that have already come about on the matter. Last month, natural resources, environment and climate change minister Nik Nazmi Nik Ahmad said that the government intends to offer additional EV incentives, and earlier this week minister of international trade and industry Tengku Datuk Seri Zafrul Tengku Abdul Aziz said that proposed incentives had been submitted to the finance ministry.
In addition to automotive-related matters, we’ll also be looking out for any public transport and infrastructure news. Live updates on these will be posted here, so stay tuned.
LIVE UPDATE POINTS
In his speech, Anwar said there was a pressing need to plug leakages from wastage as well as irregular payments and collections, something highlighted in the Auditor General’s reports for 2020 and 2021. The reports revealed that there was a leakage of almost RM3 billion, resulting in the loss of public money. One example of this is in the under-collection of vehicle import duty, where the government has lost RM72 million due to a weak import duty collection process.
In addition, there is also a significant leakage in the implementation of diesel subsidies – it is estimated that nearly RM10 billion worth of diesel subsidies were misappropriated last year.
Absorbing the cost of licence tests
- The government will bear the cost of riding test for B2 motorcycle category (below 250 cc)
- It will also absorb the cost for taxi, bus and e-hailing licence PSV test fees
- Electricity tariffs have been maintained for all domestic consumers and SME businesses, but those for all large companies (except those in the food and agriculture sector) have been increased. This means that there will be no additional cost impact for charging an EV at home
- The government will expand and improve the capacity of Penang International Airport and Subang Airport
Road network projects
- RM2.7 billion will be allocated to maintain and upgrade federal roads
- RM1.5 billion will also be provided to upgrade rural roads and build new ones
- RM480 million to construct a new road from Habu to Tanah Rata, Cameron Highlands, Pahang
- RM300 million to upgrade Jalan Tun Hamzah to the Semabok intersection at Lebuh AMJ in Melaka
- RM160 million to build a road and bridge across Sungai Sepang to connect Bukit Pelandok, Port Dickson and Sungai Pelek in Sepang
- The road network to Pengerang, Johor will be improved with a new overtaking lane on Senai-Desaru Highway
- RM525 million to widen the Johor stretch of PLUS from Yong Peng Utara to Senai Utara to six lanes
On the issue of potholed roads, district JKR offices will speed up the paving of federal road damage as well as other urgent repairs based on complaints received from the people. RM100,000 will be allocated to each district for this purpose.
The government says it will also continue and expedite the implementation of the Pan Borneo Sabah highway and the Sarawak-Sabah Link Road, which is estimated to involve a total cost of RM20 billion.
Road lighting infrastructure to be improved
- A total of RM50 million will be provided to install street lights, especially in high accident areas
- My50 travel pass monthly subscription initiative will be continued, to benefit nearly 180,000 users
- myBAS50 unlimited travel pass pilot project to be introduced in Johor Bahru for the SBST programme
- RM150 million to expand the implementation of the SBST programme to Melaka, Kuching and Kota Kinabalu
- The government is aiming to bring down the development cost for the project from the estimated RM50 billion it is at right now to under RM45 billion.
Electric vehicles (EV)
- Import and excise duty exemption for fully-imported CBU EVs extended to December 31, 2025 (two-year extension from end-2023, previously extended to end-2024 in first tabling of Budget 2023)
- Excise duty and sales tax exemption for locally-assembled CKD EVs extended to December 31, 2027 (two-year extension from December 31, 2025)
- For manufacturers of EV charging equipment: 100% income tax exemption from YA 2023 to 2032
- For manufacturers of EV charging equipment: 100% investment tax allowance (Elaun Cukai Pelaburan)