MACC Takes Down Langkawi Luxury Car Tax Fraud Syndicate

The MACC alleges for the syndicate to have conspired with luxury car owners in obtaining duty exemptions and deductions, despite being ineligible. 

While supercars aren’t exactly a rarity over here in Malaysia, seeing one however without the initials KV in its number plate is certainly akin to spotting hen’s teeth. 

And while the frankly ludicrous scheme of Langkawi being a tax shelter for these cars looks to remain in place for the foreseeable future, there does look to be much tighter scrutiny by authorities placed on these rich folk who stash their high-powered hypercars over on the duty-free island. The most recent example of which involved the Malaysian Anti-Corruption Commission (MACC) having nabbed six members of a syndicate that is said to be involved in a luxury car duty evasion scheme, which allegedly cost the government RM 33 million. 

The latest development in what the MACC has dubbed Operation Eagle Eye, the six members of the syndicate were alleged to have conspired with luxury car owners in obtaining duty exemptions and deductions despite being ineligible. Said offenders apparently utilised false names in car registrations to deceive the Royal Malaysian Customs Department during purchases, when working as managers and runners of a warehouse in Langkawi that stored luxury cars from brands like Lamborghini, Ferrari, Porsche, Bentley, McLaren and Rolls Royce. 

These six offenders are expected to be charged tomorrow (16th January 2024) with more than 21 charges under Section 468 and Section 471 of the Penal Code for forgery and fraudulent or dishonest use of genuine documents respectively, senior director of the MACC’s Special Operations Division Datuk Azmi Kamaruzaman confirmed with Malay daily Utusan Malaysia yesterday. The aforementioned law provides for a maximum punishment of up to seven years in jail and a fine for those convicted of the offence.

Moreover, Azmi was further quoted in saying for the MACC to also be investigating the vehicle owners themselves under Section 4(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) for possessing and disposing of proceeds from these serious criminal activities. So there might just be a few luxury car owners currently ringing up their high-powered lawyers right now…

Now speaking further regarding Operation Eagle Eyes, this MACC sting was initiated after the Auditor-General’s 2022 report disclosed a dearth of some RM 72 million in duty collection for over 100 luxury vehicles from the Customs Department in Langkawi between 2012 and 2021. The first phase of this operation previously saw the agency confiscating nine luxury cars of various brands worth around RM 12 million from various locations in the northern part of the country, Johor and Sabah in July 2023, with 7 people connected to the scheme being arrested as well. 

It still nevertheless baffles though that such a bizarre (and frankly brazen) tax-evading practice is allowed to still carry on in Malaysia, especially in the time when the government is struggling to balance its books. And while there may be the pretty legitimate argument that our local auto import duties could well do with some redressing, it is probably not the most controversial statement to make that those who can afford a flash car should also be able to afford to contribute as much to the coffers of our nation.  

Joshua Chin

Automotive journalist. Professional work on and Personal writing found at Instagram: @driveeveryday

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