Luxury vehicles that are priced over RM300,000 will no longer be able to enjoy tax exemptions in Langkawi and Labuan. The new policy was revealed by Prime Minister Anwar Ibrahim during the tabling of Budget 2026 earlier today.
According to the Prime Minister, the tax exemptions have been abused, especially by the “maha kaya” or “ultra-rich” group, to obtain luxury vehicles at a lower price. While these vehicles are generally confined within these duty-free islands, the current policy does allow them to travel outside of the islands for up to 90 days.
Just to generally illustrate the stark differences between the price of a luxury vehicle with and without taxes, let’s take the sports car shown in the picture above, the Lamborghini Revuelto. When it was launched in Malaysia back in 2023, it had a starting price of RM2.5 million, not inclusive of taxes.
Once you include taxes, the starting price would then go up to RM6.5 million. So, you are looking at a difference of RM4 million from just one vehicle alone.
Meanwhile, the new policy will be in place starting from 1 January 2026. Expect further details to be announced in days and weeks to come, as Budget announcements don’t usually provide in-depth details.
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