Malaysia tightens Langkawi vehicle duty-free rules to curb luxury tax avoidance

In a parliamentary debate, Deputy Finance Minister Liew Chin Tong said the government will limit vehicle duty-free exemptions on Langkawi to a value of RM300,000 starting Jan 1 2026, targeting schemes where rich individuals store luxury cars on the island to avoid higher taxes. He noted the measure addresses revenue leakage while preserving benefits for local residents, car-rental businesses, taxi services and commercial vehicle users.

Liew acknowledged that some operators may be affected but stressed that ordinary citizens will not lose access to needed vehicles. He also highlighted a separate budget decision raising the duty-free purchase limit for tourists from RM1,000 to RM10,000, expanding eligible goods and requiring a minimum 48-hour stay to boost the hospitality sector. Additionally, the list of Langkawi-made products eligible for duty exemption will grow from 23 to 29 items, supporting local MSMEs, with both changes effective Jan 1 2027.