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Excise Duty Exemption on Tourism Vehicles

Updated: Jul 17

Update: The Ismail Sabri Government Budget is no longer applicable. Malaysia's national budget for 2023 was re-tabled again in February 2023.

To Download Revised Budget 2023 Speech and some other related publications -

This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023.

MOF response: Not to be continued/Discontinued.
Something about Tourism and Travel Related Services

Tourism and Travel Related Services are divided into four (4) sub-sectors, namely:

  • Hotels and restaurants (including catering);

  • Travel agency and tour operator services;

  • Tourist guide services; and

  • Other tourism services.

Tourism activities are part of more general services activities, most notably many transport services, certain business services, distribution services, and recreational, cultural and sporting services.

Given the foreign exchange earnings potential, Malaysia gives a lot of importance to the tourism sub-sector.

Major sub-sector tourism industry guidelines include Hotel and Restaurant, Tour Operating/Travel Agency Business, Tourism Vehicle Business, and Malaysia My Second Home Scheme (MM2H). Other tourism activities include Meetings, Incentives, Conferences, Exhibitions (MICE), Medical/Health Tourism, and SPA and Wellness Services.


Tourism Vehicle’ means an excursion bus or hire-and-drive car.

Tourism Vehicle Business’ means the business of operating or letting out for hire a tourist vehicle.

Section 4 of the Tourism Vehicles Licensing Act 1999 states that tourism vehicles must be licensed.

“(a) No person shall carry on or hold himself out as carrying on tourism vehicle business except a company which is licensed under the Tourism Industry Act, 1992 and which holds a valid licence granted under this section.”

Current Position

In supporting Visit Malaysia Year 2020, an excise duty exemption of 50% was given to tourism operators on purchasing new locally assembled tourism vehicles effective from 1 January 2020 to 31 December 2021.

Proposal [This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023]

To support the recovery of the tourism industry that has been affected by the COVID-19 pandemic, it is proposed50% excise duty exemption be given on the purchase of new locally assembled tourism vehicles as follows:

  • Hire and Drive Cars for Tourists; and

  • Excursion Bus.

Effective Date

For applications received by the Ministry of Finance from 1 January 2023 to 31 December 2024.

Something about Tourism and Travel-Related Services:-

177.1 Something about Tourism and Travel Related Services
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