Under Budget 2026, the government has proposed capping tax exemptions in Langkawi and Labuan to vehicles worth no more than RM300,000, starting January 1, 2026.
Prime Minister Anwar Ibrahim said the move comes after the government discovered that some luxury vehicle owners have long exploited the tax exemption privileges in these duty-free zones. The measure aims to ensure fairer implementation of tax benefits and prevent misuse of the policy.
