Why Is Road Tax Cheaper in Sabah and Sarawak?

If you have ever compared road tax with a friend or relative across the South China Sea, you may have noticed something odd. Two cars with the same engine size can pay different amounts, and the owner in Sabah or Sarawak usually pays less.

This is not a mistake. JPJ (the Road Transport Department) sets separate road tax rates for East Malaysia. This guide explains why the rates are lower, how big the difference is for cars and motorcycles, and why registering a car in Sabah or Sarawak is not a shortcut for Peninsular drivers.

What decides your road tax in the first place

Road tax, officially called the Motor Vehicle Licence (LKM), is compulsory for every vehicle used on Malaysian roads. You must renew it every year, and you need valid motor insurance or takaful before JPJ will issue it.

Unlike insurance, your road tax does not change from year to year as long as you keep the same vehicle. It is set by four main factors:

• Engine capacity (cc): the bigger the engine, the higher the rate. Electric vehicles are charged by motor output in kW instead.
• Vehicle type: saloon cars (sedans, hatchbacks and similar) and non-saloon vehicles (such as many SUVs, MPVs and pick-ups) have different rate schedules.
• Ownership: in Peninsular Malaysia, cars registered to a company pay higher rates than cars owned by individuals.
• Location: Peninsular Malaysia, Sabah, Sarawak and some islands, such as Labuan and Langkawi, each have their own rates.

Location is the factor that explains why East Malaysian drivers pay less. The rest of this article focuses on it.

Why road tax is cheaper in Sabah and Sarawak

The main reason is the difference in road conditions and travel needs between East Malaysia and the Peninsula. Lower road tax is meant to make the charge fairer for drivers who get less from the road network.

Road conditions and longer journeys

In a 2016 report, a JPJ automotive engineering director explained that Sabah and Sarawak differ greatly from the Peninsula in geography, travel distance and the condition of road facilities. Many rural roads are narrow or poorly surfaced, so even short trips can take a long time. In some areas, drivers still need to queue for a ferry to cross a river. You can read the report on JPJ’s explanation for the full background.

Drivers often need bigger, costlier vehicles

Because of these roads, many families outside the main towns rely on four-wheel-drive vehicles to reach interior areas. A small city car may be practical in Kota Kinabalu or Kuching, but not on a logging road or a hilly village track. Bigger vehicles cost more to buy and run, so lower road tax helps balance out the extra cost.

A different rate structure kept in place

According to the same report, the cheaper rates are meant to compensate for these shortcomings, and they could be reviewed once the road network in Sabah and Sarawak reaches Peninsular standards. In 2020, the then Transport Minister also said that Sarawak would keep its own road tax structure because of local conditions, and would not be brought in line with the higher Peninsular rates. You can read the Malay Mail report on that statement.

How big is the difference for cars?

For engines up to 1,000cc, road tax for a private saloon car is RM20 everywhere. From 1,001cc onwards, Sabah and Sarawak rates are lower, and the gap grows quickly with bigger engines. The figures below are annual rates for private saloon cars owned by individuals, worked out from JPJ’s LKM rate calculation guide.

Engine capacity	Peninsular Malaysia	Sabah and Sarawak
1,000cc and below	RM20	RM20
1,001cc to 1,200cc	RM55	RM44
1,201cc to 1,400cc	RM70	RM56
1,401cc to 1,600cc	RM90	RM72
1,800cc	RM280	RM224
2,000cc	RM380	RM274
2,500cc	RM880	RM524
3,000cc	RM2,130	RM1,024

For a 3,000cc car, an East Malaysian owner pays less than half of what a Peninsular owner pays. Above 1,600cc, the amount is a base rate plus an extra charge for every cc above a set level, so the exact figure depends on your engine size. For more engine sizes and the full Peninsular list, see our road tax price list by engine cc.

Non-saloon vehicles such as SUVs and MPVs

The gap is even wider for many non-saloon vehicles. For example, a private non-saloon vehicle with a 1,500cc engine pays RM120 a year in Peninsular Malaysia but RM60 in Sabah and Sarawak. At 2,000cc, it pays RM440 on the Peninsula and RM243 in East Malaysia.

Company-registered cars on the Peninsula pay higher rates again, while Sabah and Sarawak use the same rate for individual and company-owned saloon cars. JPJ’s guideline also sets separate, lower rates for Labuan, Langkawi and Pangkor.

How big is the difference for motorcycles?

Motorcycle owners in East Malaysia also pay less once the engine is above 150cc. Motorcycles of 150cc and below stay at the existing rate in every region. Here are the annual rates for private motorcycles in some common bands, based on JPJ’s guideline:

Engine capacity	Peninsular Malaysia	Sabah and Sarawak
151cc to 200cc	RM30	RM9
201cc to 250cc	RM50	RM12
501cc to 800cc	RM250	RM40
Above 800cc	RM350	RM42

So a 250cc bike costs RM50 a year to tax on the Peninsula but only RM12 in Sabah or Sarawak. For big bikes above 800cc, the East Malaysian rate is less than one-eighth of the Peninsular rate.

Can you register your car in Sabah or Sarawak to pay less?

Some Peninsular owners have tried registering vehicles in East Malaysia or on duty-free islands to enjoy the lower rates, even though the vehicle is mainly used on the Peninsula. The government has long treated this as unfair and as a leak in road tax collection.

In June 2026, Parliament passed amendments to the Road Transport Act 1987. Among other changes, they set up a framework that requires vehicle owners to declare where their vehicle is mainly used. Owners whose vehicles are registered in a lower-rate area but used mainly elsewhere may have to pay the difference, and penalties can apply. You can read a summary of the key changes in the new road transport law.

The start date and the full details of the declaration process have not yet been announced. If you genuinely live and drive in Sabah or Sarawak, you continue to pay the East Malaysian rates. If you move between regions, check with JPJ which rate applies to your vehicle before you renew.

Check the right rate before you renew

Road tax in Sabah and Sarawak is lower because the roads and travel conditions there are tougher, and the government has chosen to keep a separate rate structure for the two states. The savings are small for compact cars but very large for big engines, SUVs and motorcycles above 150cc.

For a quick table of East Malaysian rates and estimates for popular models such as the Myvi, Saga and City, see our guide to road tax in Sabah and Sarawak. When you are ready to renew, remember that you need valid motor insurance first.

Compare car insurance and renew your road tax online with Bjak in a few simple steps.