Road tax, formally known as lesen kenderaan motor (LKM), is one of the biggest sources of income for Malaysia, and that is why it will be here to stay. How much does the government collect exactly? Transport minister Anthony Loke revealed that the annual revenue from road tax is RM3 billion.
He added that the transport ministry is considering a review of the road tax structure, but one shouldn’t be holding out for a lower rate, as that would “create a negative impact”.
“There is a need to conduct a comprehensive review on the road tax structure but it must be understood that road tax is one of the biggest revenues for the government. Currently, it generates almost RM3 billion. So far, there is no decision to lower it,” Loke said yesterday at parliament, reported by NST.
“Any decision that could decrease the country’s revenue, such as lowering the road tax fees, would only create a negative impact,” the Seremban MP added.
This is not the first time that Loke was fielded a road tax question, now that LKM is back in the conversation thanks to the ministry’s decision to digitalise JPJ documents, making road tax stickers optional.
“Road tax is one of the government’s sources of income. If all are exempted, then the government will have no income and how are we to administer the country? We need to understand that in any country, the government needs to have income, especially tax,” Loke said earlier this month in response to calls from some netizens for the government to abolish road tax.
He added then that JPJ collects over RM4 billion every year and road tax receipts are a big portion of it. Now we know that the portion is indeed big at three quarters.
Want to save on road tax? Electric vehicles are exempted from road tax till the end of 2025, and Loke has hinted at lower road tax rates for EVs when it’s finally time for EV owners to buy LKM. Currently, EV road tax – which uses a kilowatt-based system as there’s no engine capacity to consider – is not just uncompetitive compared to regular internal combustion engine cars, it’s much higher.
The post Road tax brings in RM3 billion revenue a year, lowering LKM rates will ‘create a negative impact’ – Loke appeared first on Paul Tan's Automotive News.
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