Government to abolish vehicle road tax as part of Budget 2023 plan

Whether the government should abolish vehicle road tax or not has lingered recently on the internet as it proposed to lessen the burden of citizens.

The implementation of road tax elimination was suggested by Member of the National Assembly, Muhammad Zahid Md Arip where it shall affect the Malaysia’s income of RM3 billion loses per year upon 2023 Budget which will be presented soon on October 28.

He also claims that through this piece of legislation is required considering vehicle owners are faced with a multi-layered tax system such as import duty, excise tax, SST tax and road tax.

Another suggestion includes the government should follow in the UK’s footsteps as the country who just lost their Queen has abolished vehicle road tax since 2015 then impose excise duty tax (VED) on vehicle owners onwards.

Currently in Malaysia, vehicle owners ought to pay between RM55 and RM380 for 1,000cc to 1,800cc.

According to our writer, if the government does not want to eliminate road tax, a reduction of tax in the automotive industry would be convenient as buyers get to purchase cars at lower prices.

This is because high insurance payments have affected the people especially the low-income group (B40).

"In order to compensate for the revenue loss caused by the repeal of this road tax, the government may consider reducing the fuel subsidy. This method is actually more equitable to the people and the government because it is aimed directly at eligible users, particularly those in the B40 group," the politican added.

However, the Malaysian government shall have the best at heart when deciding best ways to help the Rakyat’s as Budget 2023 is being drawn up by the Ministry of Finance (MOF).