ROAD tax discussions took centre stage recently after it was announced that private vehicle owners no longer needed to display the road tax or carry a physical copy of the driver's licence.
After much confusion, Transport Minister Anthony Loke has cleared the air by saying the MyJPJ app is not compulsory while the road tax sticker and physical driver's licence can still be obtained at Road Transport Department (RTD) offices.
Loke said the digitalisation move was aimed at easing the long queues at RTD offices and potentially save the government RM96 million a year on printing fees.
What is not optional is paying the road tax (or renewing the licence), from which the government earns more than RM2 billion annually.
But could the government earn more and the public paying a fairer rate in accordance to their affordability?
There is presently a disparity and the traditional method of calculating the road tax is outdated and needs to be restructured.
To simplify, the RTD's guidelines summarise that the price of a car's road tax is calculated based on four core factors: engine capacity, location of the vehicle (e.g. Peninsular Malaysia, Sabah or Sarawak, or duty-free zones), vehicle body type (saloon or non-saloon), and ownership type (private or company).
Years ago, it was simply understood that the more expensive the cars, the higher CC their engines were. However, that is no longer applicable with automotive companies introducing smaller engines but with superior performances.
For example, the RM228,800 BMW 218i that has the same road tax price of RM90 as a RM50,900 Myvi X variant as both cars have a 1.5-litre engine; this is the flat rate for 1,401cc to 1,600cc engines.
The current road tax system does not take into account the car's price, its performance or the owner's economic standing.
It's not only imbalance but also complicates matters when the government tries to implement incentives or subsidies based on household income or an individual's earning capacity.
The United Kingdom's Vehicle Excise Duty road tax, for example, is calculated based on the car's on-the-road price and its carbon dioxide emissions. This evens out rates especially when there are electric vehicles (EVs) to consider.
It also takes into account when the car was registered — charges depending on before or after the introduction of the current rates for different pricing.
As of last year, UK car owners could apply to stop paying vehicle tax for cars that were 40 years or older.
Speaking of EVs in Malaysia, there are concerns that road tax rates for them are considered less than favourable should the current exemptions come to an end on Dec 31, 2025.
As per RTD's guidelines from 2019, road tax rates for EVs are calculated based on its power output in watts (W), although most EVs publicly have their power delivery listed in kilowatts (kW). This is then factored by type of vehicle (saloon and non-saloon).
Here's an example without getting into the long formula calculations, BYD's Standard Range Atto 3 (priced from RM149,800) with a power output of 150kW will have a road tax of RM903 (non-saloon EV).
Mercedes-Benz's EQC 400 4Matic (priced from RM393,888) with a 300kW power puts the rate at RM4,503, and so forth.
In contrast, the GLC Coupe, with a 1,991cc internal combustion engine, is priced at RM403,888 and has a road tax of RM436.40.
Thus, the current road tax system needs to be addressed to promote the nation's carbon neutral goals.
(Current local road tax guidelines can be found at jpj.gov.my under the Motor Vehicle Licence Rates Calculation Guidelines subsection)