The Digest:
The federal government has approved new fiscal policy measures for 2026, slashing import duties on cars, crude palm oil, sugar, and rice. Fully built passenger vehicles now attract 40% total effective tariff, down from 70%. Crude palm oil dropped to 28.75% from 35%, while rice and sugar rates were reduced from 70% to 47.5% and 57.5%, respectively. A new excise duty and green tax surcharge take effect on July 1, 2026. Electric vehicles are exempt from the green tax.
Key Points:
- The policy includes 127 tariff lines with reduced import duty rates.
- A 90-day grace period applies for importers who opened Form 'M' before April 1.
- Agriculture and manufacturing machinery now attract 0% duty.
- Railway locomotives and cargo ships over 500 tonnes are also at 0%.
- Vehicles below 2000cc and mass transit buses are excluded from the green tax.
