PROMOTION OF INVESTMENTS
Incentive to Promote Export of Publishing and Information and Communications Technology
Companies which export Malaysian services are given an exemption of their statutory
income equivalent to 10% of the value of increase in exports. Presently, only companies
in the following services sectors are eligible for this incentive :-
As a measure to promote other services which have high export potentials, the Minister
of Finance has proposed in his Budget Speech that the present incentive for promoting
export of services be extended to include publishing services and ICT services.
The proposal is to be effective from year of assessment 2001.
Incentive for Utilising Biomass as a New Source of Energy
Currently, the Government is adopting a 4 fuel strategy that is water, oil, gas and
coal to generate electricity supply in the country. To further diversify the energy
sources, the Government is promoting biomass as a new energy source which is renewable
and environmental friendly.
To encourage the generation of energy using biomass, it is proposed that companies
which undertake such activities be given the following incentives :-
||Income tax exemption of 70% on statutory income for 5
years or Investment Tax Allowance of 60% on capital expenditure incurred within a
period of 5 years which is to be utilised against 70% of statutory income; and
||Import duty and sales tax exemption on machinery and
equipment used in the project that are not produced locally. For machinery and equipment
that are produced locally, sales tax exemption will be given.
These incentives are applicable for applications received from 28th October 2000
until 31st December 2002 on condition that the project is implemented within 1 year
from the date of approval.
Incentive for Companies Providing Cold Chain Facilities and Services for Food Products
The availability of cold room and refrigerated truck facilities and related services
will prolong the shelf life of locally produced perishable food products. This will
assist farmers in obtaining a more reasonable price and help stabilise prices of
food products in the market.
Currently, companies providing cold room and refrigerated truck facilities and related
services such as collection and treatment of locally produced perishable food products
are not given any tax incentive.
To encourage companies to provide such facilities, it is proposed that the following
incentives be given :-
||Pioneer Status with exemption of 70% on statutory income
for a period of 5 years; or
||Investment Tax Allowance of 60% on capital expenditure
incurred within 5 years to be deducted against 70% of statutory income.
These incentives are effective from 28th October 2000.
Extension of Incentives for Promoted Areas
Currently, manufacturing, agricultural and tourism projects located in certain promoted
areas enjoy enhanced tax incentives. The promoted areas are the Eastern Corridor
of Peninsular Malaysia, Sabah and Sarawak. Such incentives which will expire on 31st
December 2000 are as follows :-
|Pioneer Status with exemption of 85% of statutory income
for a period of 5 years as compared to 70% exemption for projects located outside
the promoted areas; or
|Investment Tax Allowance (ITA) of 80% on qualifying capital
expenditure to be utilised against 85% of statutory income as compared to ITA of
60% to be utilised against 70% of statutory income for projects located outside the
promoted areas; and
||100% Infrastructure Allowance on capital expenditure
incurred for the provision of infrastructure such as bridges, roads or ports.
To accelerate the development of the promoted areas, it is proposed that the current
incentives be extended for another 5 years until 31st December 2005.
A service brought
to you by MIR Communications Sdn Bhd in cooperation with
Deloitte KassimChan Tax Services Sdn Bhd and Deloitte Touche Tohmatsu Tax Services
© October 2000