Customs to crack down on tax-free luxury car abuse

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.

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Mohan K Ramanujam

Coming with diverse and extensive experience in heavy engineering, Mohan enjoys making anything with wheels go fast, especially motorcycles. His weapon of choice is the Desmoquattro engine, and he has a penchant for anything with a dash of Italian design. Strangely enough, he insists he's a slow rider.

 

Comments

  • kapchai on Jan 29, 2016 at 9:49 am

    cloned cars, langkawi cars etc. JPJ should buck up

    Like or Dislike: Thumb up 19 Thumb down 0
    • KDRM - Bentley 6750 CC Apa Jadi? on Jan 29, 2016 at 11:03 am

      Nearly every Bentley in the Klang Valley is supposed to pay about RM18,000 road tax cause the cc is 6750.

      Go close to the road tax, you will see he only pays RM4000. This is because, he gets the road tax from Sabah and Sarawak eventhough the car is a KL registered Bentley.

      This deprives the Government and our LHDN hundreds of millions per year.

      But JPJ very very scared to touch all these Bentley guys cause most of them are UMNO linked Datuk or Tan Sri

      So, it is fair that these millionaire Datuks and Tan Sri cheat our Government and LHDN of money?? When LHDN or KDRM has no money, money to schools and hospitals stop.

      So, in other words, these Billionaire Tan Sri and Datuks, who can buy million ringgit cars, are causing the old and sick to be deprived of healthcare.

      Well-loved. Like or Dislike: Thumb up 59 Thumb down 0
  • shawal on Jan 29, 2016 at 9:49 am

    will these cars then be auctioned off to the public…?

    JPJ shud make a website like ‘ebay’ for auction vehicles…
    it’ll be a great way to further increase ‘revenue’ by sales of said vehicles, registration fees , advertising,

    Like or Dislike: Thumb up 13 Thumb down 0
    • AP Holders Underdeclare on Jan 29, 2016 at 12:00 pm

      Why KDRM never do anything to the thousands of cars that AP holders underdeclare by value and year of make?

      Scared ah?

      Like or Dislike: Thumb up 13 Thumb down 0
  • Question; how long till you are able to take it out of langkawi / labuan?

    Like or Dislike: Thumb up 9 Thumb down 1
  • I bet ministers themselves abuse the regulations and owe millions unpaid duties.

    Like or Dislike: Thumb up 23 Thumb down 1
  • kereta_lembu on Jan 29, 2016 at 10:03 am

    In the first place, this loophole shouldn’t have happened. I’m sure certain parties made a lot of dough by abusing the system. If an average joe like me is aware that such things are happening, it puzzles me that the authorities take so long to figure things out. I guess we all know that the sudden urgency is due to the gov needing more money to cover up their incompetence.

    Like or Dislike: Thumb up 15 Thumb down 1
  • cendol (Member) on Jan 29, 2016 at 10:25 am

    well, the tax abuse will not happen if our car taxes are not that high to start with.
    The ONLY way is to reduce all those taxes and GST above those taxes which is tantamount to double tax.

    Like or Dislike: Thumb up 8 Thumb down 2
    • kereta_lembu on Jan 29, 2016 at 3:01 pm

      If the current gov remains in power, I doubt that tax will be reduced from our vehicles. If any, it will be minimal and not what people expect to see. Do understand that for so long, they have been raking in so much money from these taxes. This is easy money for them, why would they want to stop that? Unless they have other better source of income for the country, they would probably maintain the high taxes. If our country is rich enough, we probably don’t need to have GST in the first place.

      Like or Dislike: Thumb up 3 Thumb down 0
  • johan on Jan 29, 2016 at 10:50 am

    They should crack down hard internally also….fix the root cause first!

    Like or Dislike: Thumb up 6 Thumb down 0
  • Nasi lemak 2.0 on Jan 29, 2016 at 11:06 am

    Foo… Suddenly custom n authority want to do their… This farkers are the main reason for this issue…. Tiba2 nak wayang. Di mana ade nasi lemak, disitu ade masalah n corruption. Example: our nasi lemak gomen

    Like or Dislike: Thumb up 12 Thumb down 0
  • carazy on Jan 29, 2016 at 11:12 am

    little money but act like a tycoon, if you not afford to pay tax, just buy proton.

    Like or Dislike: Thumb up 0 Thumb down 1
  • gaviny on Jan 29, 2016 at 11:38 am

    basically what JPJ is saying is remove the tax free status of Langkawi and Labuan,

    problem solved

    Like or Dislike: Thumb up 5 Thumb down 0
  • Thesunriver on Jan 29, 2016 at 11:49 am

    Why take 3 months to study on an existing system? That is because it takes 3 months for all this HoHa to die down. Then all will be statu-quo.

    Like or Dislike: Thumb up 4 Thumb down 0
  • ae101 on Jan 29, 2016 at 11:57 am

    Again wayang kulit syok sendiri talk. I can bet my ass they gonna catch the small fish only. Custom officer, if you raid your own bosses or directors, I’m sure you will surprise suddenly few hundred million come out.

    Like or Dislike: Thumb up 4 Thumb down 0
  • Let see….most of them are all “you know which party” cronies and top brass

    Like or Dislike: Thumb up 5 Thumb down 1
  • Ollie on Jan 29, 2016 at 12:19 pm

    Did you know that almost all high-performance cars in Malaysia, as in low-volume niche models, i.e. certain Mercs, McLaren, Porsche, Ferrari, Lambo, get sold tax-free.

    How? The dealers have deal with JPJ, underground. Obviously the person who told me this shall not be named, and neither did he tell me exactly how. But this person deals in *** high-performance cars, and had sold 10 cars to a bunch of rich dudes, in one transaction. List price: RM 1.1 mil, sold for 0.7k each tax-free.

    Yes, poor people like you and me pay the taxes in this country :)

    Like or Dislike: Thumb up 12 Thumb down 0
    • There are many loopholes. And the proprietor is almost always the ap holders and JPJ.

      Like or Dislike: Thumb up 5 Thumb down 0
 

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