Ferrari 488 Spider Frankfurt 1

In a bid to stem losses amounting to millions of ringgit in revenue, the Royal Malaysian Customs department yesterday announced that it will be implementing measures to clamp down on evaluation and payment of duty on imported vehicles in Langkawi and Labuan.

From a report by the Sun, Customs director-general Datuk Seri Khazali Ahmad said, “we are studying various regulations and guidelines. It should not take more than three months.” In his speech yesterday on the budget revision, Prime Minister Datuk Seri Najib Razak said regulations and procedures applicable to free duty vehicles on the two islands would be tightened, but would not affect residents.

Under Clause 21A of the Customs Duty Order (Exemption) 1988 allows for imported vehicles registered on the islands to be brought to the mainland, provided it is not for more than 30 days on a single visit, and up to a maximum of 90 days in total per year.

However, it is known that many such luxury vehicles brought to the mainland never return to the islands, according to Khazali. “The current system has been abused by some quarters who owe millions in unpaid duties. To curtail this, we are reviewing the tax free status (of imported vehicles) for Langkawi,” he said.

A large number of luxury vehicles have been seized on the mainland for unpaid duties and taxes, after a rise in the number of registrations of such vehicles on the islands was noticed. The cars included Ferraris, Lamborghinis, Bentleys, Rolls-Royces and Porsches and the amount of unpaid duty amounted into the millions. In some cases, the duty-free prices of these brands are openly quoted at launches.

The cars were registered on the islands with the JPJ using false addresses and permission obtained from the Customs to leave the island for the mainland for 90 days. However, the vehicles never returned to the islands. Offenders can be fined up to 20 times the value of the vehicles or face three years’ jail, or both, upon conviction.

In a move to curb such abuse, Labuan Customs and the Road Transport department (JPJ) introduced the e-Vehicle system to monitor the movement on Labuan-registered vehicles, targetting those with unpaid summonses, compounds, taxes and duties, and those which exceeded the 90-day mainland visit.