An image of the vehicle has gone widespread on social networks since January 14 and its owner had been detained and questioned about the logo.
The traffic police arrested Chit Ko Ko (38), the owner of the car with the registration number YGN 4I-1056 at 195th Street, Tamwe Township, on Wednesday evening.
A translator called in by the police says the Arabic words pronounce "La Ilaha IllAllah Muhammadur Rasulullah" and no other meaning.
"The car owner said that his younger brother who made a pilgrimage recently had given him the sticker as a gift. Now the logo has been removed. He said he stuck the logo just for his religious belief and no other purposes. But the police is still continues its investigation," said police Lt Col Myint Htwe on January 15.
"The vehicle is found to have no official registration number plate installed. The sticker is stuck illegally. And its owner has also been facing a charge of illegal driving while his vehicle is still under official registration process. And the car owner out on bail," said police Lt Col Lin Htut from No (2) Traffic Police.
Police officer Khin Mya Maung in charge of Tamwe Township Police Station said, "The case is under official investigation by the traffic police. We have not taken any action yet."