Malaysia Rolls Out Big Tax Incentives for Green Technology
Malaysia’s government is strongly backing nationwide growth and development of green technology by proposing generous tax incentives surrounding that business sector.
Malaysia’s 2014 budget introduced two big incentives for investments and expenditures in green technology.
The first is a green investment tax allowance (GITA) of up to 100 percent on money spent funding green technology projects or acquiring green assets. This makes it very attractive and economical for Malaysian businesses to spend money researching and developing sustainable technology. Likewise, the purchase of green technology – such as energy efficient equipment, sustainable remodels, and sustainable supply chain or business infrastructure improvements – is strongly encouraged.
The second is an income tax exemption of up to 100 percent for the use and provision of green technology services and systems. This two-sided incentive encourages both companies providing green tech, and companies using it.
Dollars spent on green services – for up to five years – can be directly deducted from taxable income, and dollars spent providing these services would be deducted just the same.
In addition to these two tax incentives is Malaysia’s Green Technology Financing Scheme (GTFS), which offers guarantees on financing and even rebates on the interest/profit rate charged by financial institutions. It’s money back in the pockets of green technology, and it provides easier access to financing for those looking to develop sustainable tech.
These initiatives provide some of the world’s most powerfully persuasive opportunities for the investment and development of green technology. It comes as no surprise then, that Malaysia is also home to Southeast Asia’s biggest green technology exposition.
Their result – the use of more efficient and sustainable systems – will ease the heavy toll industry and economy have taken on Malaysia’s natural environment. Over the years, increased incorporation of sustainable technology will work to undo the damage and pollution plaguing the country’s air, water and breathtaking tropical forests.
The move, like the tax incentives, is two-sided. In addition to respecting Malaysia’s environment, the proposals fit within Malaysia’s goal to become a hub of green technology for the entire Southeast Asian region.