Budget 2027: MAA proposes up to RM10k income tax rebate for EV and hybrid purchases

Ahead of the upcoming Budget 2027 announcement, the Malaysian Automotive Association (MAA) has submitted several key proposals to the Ministry of Finance (MoF) to accelerate the country’s transition to green mobility.

Among the proposals is a direct personal income tax rebate ranging from RM7,000 to RM10,000 for electrified vehicle (xEV) purchases. These xEVs are not limited strictly to battery electric vehicles (BEVs), but also include traditional hybrids (HEVs), plug-in hybrids (PHEVs), and hydrogen fuel cell vehicles (FCEVs).

Direct tax rebates to drive mainstream xEV adoption

According to MAA President Mohd Shamsor Mohd Zain, there are currently no direct consumer purchase subsidies or income tax rebates available for xEV buyers in Malaysia. This is despite the existing individual tax relief for EV charging equipment and subscriptions.

In its proposal to the MoF, MAA suggests a RM7,000 to RM10,000 personal income tax rebate for individuals who purchase an xEV. At the same time, the trade association proposed extending the existing RM2,500 individual income tax relief for EV home charging and subscriptions.

The association believes the tax rebate can lower the upfront cost of xEV ownership and help stimulate consumer demand. Increasing demand would, in turn, justify local assembly (CKD) investments by carmakers while boosting the utilisation rate of Malaysia’s growing charging network.

Aside from personal income tax rebates for xEVs, MAA has also proposed a RM5,000 tax rebate for car owners who voluntarily scrap their old vehicles (aged 20 years or older) when purchasing a new CKD car, alongside extending the 100% Green Investment Tax Allowance (GITA) for Charge Point Operators (CPOs).

In addition, the association asked the government to consider establishing an automotive supplier capability development fund to help strengthen local Tier 2 and Tier 3 suppliers. The tabling of Budget 2027 by Prime Minister Datuk Seri Anwar Ibrahim is scheduled to take place on Friday, 9 October 2026.

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