The government has reiterated that the move to cap the duty and tax exemptions at a value of RM300,000 for vehicles sold in Langkawi has been to prevent high-net-worth individuals from abusing Langkawi and Labuan’s tax-free status to purchase luxury cars at lower prices.
Deputy finance minister Liew Chin Tong said that changes to the duty and tax exemption policy for vehicles, which were introduced on January 1 this year, were to address revenue leakages and discourage the practice of having individuals keep luxury vehicles on the island for several years before bringing them into the Principal Customs Area to avoid paying higher taxes.
“At its core, this is a business model that we do not wish to promote, and we hope this policy will be accepted by all citizens,” he told the Dewan Rakyat.
