In the 1998 Budget, the following amendments in respect of imported
heavy machinery used in the building and construction, mining, plantation and timber
industries were proposed :
- reduction in initial allowance rate to 10%.
- reduction in annual allowance rate to 10%.
The above proposed amendments have been gazetted via the Income
Tax (Qualifying Plant Allowances)(No. 2) Rules 1997 for qualifying plant expenditure
incurred on or after October 17, 1997 in respect of imported heavy machinery as set
out below :
- building and construction industry - earth-moving plant and heavy
equipment-bulldozers, ditchers, excavators, graders, loaders, rippers, rollers, rooters,
scrapers, shovels, tractors.
- mining industry - earth-moving plant and heavy equipment.
- plantation industry - earth-moving plant and heavy equipment.
- timber industry - heavy equipment-bulldozers, tractor engines,
tractors and timber haulage vehicles.
In addition, pursuant to the Income Tax (Qualifying Plant Initial
Allowances) Rules 1998 which shall have effect from the year of assessment 1998,
initial allowance in respect of qualifying plant expenditure on the provision of
machinery or plant (other than those imported heavy machinery as specified above)
used for the purposes of a business of a person carried on in Malaysia, which consist
- the construction of any works, roads, structures and buildings;
- the extraction of timber from a forest; and
- the working of a mine for getting tin-ore or extracting or dressing