According to the Malaysian finance ministry‘s ‘Fiscal Outlook and Federal Government Revenue Estimates‘ report, total government revenue from vehicle import duties, excise duties and sales tax this year is estimated to be RM11.1 billion, and this is expected to rise 4.5% to RM11.6 billion next year.
The 2025 estimates can be broken down into RM630 million in import duties, RM3.97 billion in CKD excise duties (cars plus motorcycles), RM3.27 billion in CBU excise duties (cars), RM2.11 billion in CKD sales tax (passenger vehicles plus commercial vehicles) and RM1.13 billion in CBU sales tax (also passenger vehicles plus commercial vehicles).
Also provided are the 2026 estimates, and you can see from the table below that while import duty revenue is not expected to change much and excise duty revenue is only expected to grow by 2.3%, the government expects to collect 10.4% more sales tax next year.
One thing that will change come next year is that fully-imported (CBU) EVs will begin contributing to import and excise duty revenues. Currently, CBU EVs are import- and excise-duty free, but they are subject to sales tax, and EVs still make up a very small piece of the Malaysian pie.
So the projected 10.4% rise in sales tax revenue has us wondering. It is possible that the relatively high quantum (around RM3 billion) and projected increase is because sales tax is applied after all the duties, which creates a compound effect. Another possible explanation is a forecasted increase in total industry volume (TIV) for 2026 over 2025.
Now, while RM11 billion in revenue may sound like a lot, remember that the government typically has to spend around RM20 billion annually in RON 95 petrol subsidies (Budi Madani RON 95 minuses just RM2.5 billion-RM4 billion from that figure). So, cheap cars or cheap petrol? Pick one, because you can’t have both!
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One wonders of how much of those actually goes into AP cronies, middle man pocket.
Too much
Waaaay, too much.
thats the reason of gomen to pushing for local manufacturing , to prevent so much of profit flow into middleman AP pocket
I like your idea that Cronies only contain APs in our system if that is the case there will not be any low quality car & parts kan for decades.
Now while RM20 billion RON 95 subsidies may sound very righteous, we should not forget that we have to subsidize petronas because of the high salary and poor finance management with these cronies in Petronas. We are a small country with big oil reserves. Countries with small population have Income Tax free,AP free, toll free,healthcare free and etc while we heboh for a subsidizing cronies. Lol.
That’s right, but it’s a start, and to be fair, a lot better than before.
(leaving aside petronas internal mismanagement), that is factually wrong, over the last many decades it had been petronas who been subsidizing malaysian govt. in fact they are by far the single biggest revenue contributor with average 30-40 billion ringgit paid to malaysia every single year. without petronas we would be no better off than indonesia or thailand .
@ProPal no Brain, Yes we are subsidizing Petronas. The oil in our land belongs to the Rakyat and not Petronas. Petronas takes our oil and enrich their cronies and give crumbs back to us and says they are subsidizing us. I want to mention again, small oil rich countries usually have tax free for income, toll free for all cars, free healthcare and zero tax on cars for their people. Ini baru boleh kata subsidi. Faham?
We have to subsidise PETRONAS? Looks like you just come out from a cave.
Asean assembled/manufactured cars should be taxed as locally made if we want the scale to match and compete with china. Otherwise we end up competing with fellow asean countries for investment.
yea, is either cheap EV or cheap petrol, you have tax in, you dont have volume anymore in CBU sales tax and excise duty then your 10% gain is highly factorized by decrease in volume. Fail to plan, plan to fail.
If EV downfall starts from next year, consequences are all investment from charger CPO will soon begins to downfall, EV market will disrupt to holland.
Madani forgot their National Energy Transition Roadmap (NETR)?
YTD Sep 2025 EV sales 26.9k, how can this help Madani? How does this tied with sales tax and excise duty next year?
Pick one side, not both.