Malaysia should abolish road tax in Budget 2023 to reduce burden on rakyat, as it is “tax on tax” – senator
Unless you happen to have a car with a large engine displacement, any thought of road tax only comes to mind when it’s time to pay the annual fee, and even then, all the attention is on how much car insurance costs. After all, a yearly road tax of RM20 for a vehicle with a 1.0 litre engine or RM70 for a 1.3 litre engine (RM90 if it’s a 1.5 litre mill) isn’t really going to dent your wallet all that much.
Still, every ringgit counts, and running with that idea, senator Muhammad Zahid Md Arip has suggested to the government that it should abolish vehicle road tax in order to ease the burden on the people. He said this is because the system currently in use is based on the concept of ‘tax on tax,’ as Sinar Harian reports.
He said that at present, vehicle owners are faced with a multi-layered system that taxes them via import duty, excise tax, SST and road tax. “Given that they have to pay taxes on multiple fronts, people, especially those living in the Klang Valley, seem to be under siege,” he said.
He added that most motorists in the Klang Valley have to use routes that are almost always subject to toll on a daily basis, hence the call to abolish the road tax in the upcoming budget.
“Malaysians cannot continue to be burdened with this ‘tax on top of tax’ and Budget 2023 is the best opportunity for the prime minister to make the people happy. I understand that the 2023 Budget consultation is currently underway, and I hope the government will consider this proposal,” he said in a statement earlier this week.
He said the proposal would be beneficial to the rakyat and the government as a whole. “The government can actually follow the United Kingdom, which has abolished road tax since 2015 and only imposes vehicle excise duty (VED) on vehicle owners, in implementing a new system,” he said.
“In order to cover the loss of revenue due to the elimination of this road tax, the government can consider reducing the fuel subsidy. This method is actually fairer to the people and the government, because it is aimed directly at eligible users, especially from the B40 group,” he explained.
Obviously, not having to pay road tax would benefit motorists (we can see those with 4.0 and 5.0 litre rides nodding happily in agreement), but there surely cannot be a free lunch for everyone. What do you think of the senator’s idea of implementing a VED system to replace the current – and outdated – road tax system? Share your thoughts with us in the comments section. As for the current road tax structure, here’s a detailed explanation of how it works.