The Royal Malaysian Customs Department (JKDM) has seized 55 vehicles worth RM7.12 million in Labuan, following a series of enforcement operations in Sabah and Sarawak conducted throughout 2025, reports Bernama.
Labuan Customs Director Aspaila Ag Tuah said the operations were targeted towards vehicle owners who had violated the terms under Item 14 of the Customs Duties (Exemption) Order 2017.
Aspaila said that under Item 14 of the order, vehicles purchased on duty-free islands such as Langkawi and Labuan can be brought into the Principal Customs Area (non-duty-free areas) for up to 90 days in a calendar year.
“Investigations found that these vehicles were brought into the Principal Customs Area using the exemption facilities, but were not returned to the duty-free islands after the allowed period,” she added.
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Aspaila added that the seized vehicles, which included luxury vehicles such as the Toyota Alphard, Toyota Vellfire, BMW, Mercedes-Benz, Audi, and MINI models, were being investigated under Section 135(1)(d) of the Customs Act 1967.
Other vehicles seized also included the Toyota Fortuner, Toyota Avanza, Toyota Unser, Toyota Vios, Hyundai Tucson, Nissan Sentra, Mitsubishi ASX, as well as other models from Honda, Subaru, Perodua, Mazda, and Chevrolet, totalling 55 vehicles worth RM7,117,025.23.
The crackdown comes just days before a major policy shift announced by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim during the tabling of the 2026 national budget (Belanjawan 2026). As part of a new ruling, vehicles valued over RM300,000 will no longer qualify for vehicle tax exemptions in Langkawi and Labuan, starting 1st January 2026.
This move is intended to prevent wealthy individuals from exploiting the tax-free benefits of registering luxury vehicles in duty-free locations, which allow them to purchase these vehicles for a significantly lower price due to exemptions in import and excise duties.
ALSO READ: Budget 2026 – Tax-free cars in Langkawi, Labuan limited to RM300k in value starting Jan 1, 2026
