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Govt can utilise IoT to systematically manage EV road tax system

KUALA LUMPUR: The government can utilise Internet of Things (IoT) technologies for a more systematic management and implementation of road tax systems, especially for electric vehicles (EV).

Malaysia IoT Association deputy president Datuk Sri Ganes Palaniapan said by integrating IoT sensors and devices into vehicles and infrastructure, real-time data on vehicle usage, emissions, and road conditions can be collected and analysed.

"This allows for a dynamic and fair taxation system where road taxes can be adjusted based on actual usage and environmental impact, rather than a flat annual fee.

"It also enables better monitoring and enforcement, reducing tax evasion and ensuring compliance," he told the New Straits Times.

IoT is used to describe devices with sensors, processing ability, software and other technologies that connect and exchange data with other devices and systems over the Internet or other communications networks.

It encompasses electronics, communication, and computer science engineering.

Ganes said effective implementation of IoT solutions for road tax systems requires a robust collaboration among the government, IoT companies and automotive manufacturers.

He said the government must provide the regulatory framework and infrastructure support, while IoT companies offer the technology and expertise.

"Automotive manufacturers need to integrate IoT capabilities into their vehicles from the design phase.

"This tripartite collaboration ensures that IoT systems are seamlessly integrated, data is securely managed, and the system remains adaptable to future technological advancements.

"Only through such a partnership can the full potential of IoT in road tax systems be realised, benefiting both the public and private sectors."

Earlier, Transport Minister Anthony Loke announced a road tax structure tailored for EVs that would take effect on Jan 1, 2026.

He said the average EV road tax rate would see a significant reduction — by approximately 85 per cent — compared to the current rate for internal combustion engine (ICE) vehicles.

Ganes lauded the new road tax structure for EV, saying that it could promote environmental sustainability and fairness in taxation.

"Yes, the new tax structure will likely encourage more road users to transition to EVs.

"By providing substantial tax reductions or exemptions for EVs, the government is creating a financial incentive for consumers to consider making the switch.

"This could accelerate the adoption of EVs in Malaysia, reducing the nation's carbon footprint and reliance on fossil fuels."

However, Ganes described it as a "radical change" that not all road users will welcome with open arms.

Transitioning to EV, he said, also hinges on the availability of EV infrastructure, such as charging stations, which is still developing in many parts of the country.

"The structure now bases taxes on emissions and vehicle types, meaning that luxury, high-emission vehicles face steeper charges, while eco-friendly vehicles enjoy tax breaks.

"This could be seen as a necessary step to combat pollution and promote a greener future, but it also imposes a financial burden on owners of older vehicles who may not have the means to upgrade."

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