Mida, GreenTech introduce tax allowances to encourage businesses to go green

PETALING JAYA (Aug 5): The Malaysian Investment Development Authority (Mida) and Malaysian Green Technology Corp (GreenTech Malaysia) have teamed up to introduce investment tax allowance (ITA) for the purchase of green technology equipment or assets. They have also introduced income tax exemption (ITE) for green technology service providers.

In a statement yesterday, Mida said the incentives will be valid until end-2020. They are aimed at catalysing green technology investment and adoption among businesses and service providers as well as to encourage certified green technology product purchase, it said.

Through the tax allowances and exemptions, sectors such as renewable energy, energy efficiency, green buildings, data centres, waste management and electric mobility are encouraged to use green technology.

Mida chief executive officer (CEO) Datuk Azman Mahmud said incentivisation plays a pivotal role in unlocking the full potential of the green technology industry.

“The introduction of these incentives, which cover a wide spectrum of areas, namely energy, transportation, building, waste management and green support services, will pave the way for greater expansion in the sector.

“This will also contribute positively towards achieving sustainable growth in Malaysia,” he said.

Azman added, “We would like to encourage more companies to implement greener practices by generating energy from renewable energy sources, installing energy-efficient equipment and decreasing their waste through various recycling initiatives with the ultimate aim of reducing greenhouse gas emissions,” he added.

According to Mida, the 100% ITA is specifically for qualifying capital expenditure incurred on green technology projects or the purchase of green technology assets listed under the GreenTech Malaysia’s MyHIJAU — Malaysia’s Green Recognition Scheme — directory.

To be eligible for ITA, companies must minimise the environment degradation or reduce greenhouse emissions, promote environmental health and improvement, conserve energy and/or other forms of natural resources, promote renewable energy (RE) usage or are able to recycle waste material resources.

While for the 100% ITE, businesses will have to have at least one competent or qualified personnel in green technology, incorporated a green policy related to the environment or sustainability in the operations and have 100% of its income derived from green technology services.

Meanwhile, group CEO of GreenTech Malaysia Ahmad Hadri Haris said the incentives were developed in consultation with the Finance Ministry and the Inland Revenue Board of Malaysia to further promote the incorporation of green technology, particularly in the fields of green buildings, renewable energy and energy efficiency.

“Our MyHIJAU directory will be instrumental in encouraging the uptake of certified and trusted green technology products that are both environmentally friendly and cost-effective in the long run,” he declared.

Ahmad added, “The introduction of these tax incentives is the next step to increasing the prevalence of green technology for businesses in the country.”

Businesses can visit www.mida.gov.my for further information on the incentive schemes.

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