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KUALA LUMPUR – The Finance Ministry has suggested that tax incentives for green activities under the green investment tax allowance (Gita) and the green income tax exemption (Gite) be reviewed based on a tiered approach.
The ministry said it suggested the investment tax allowance (ITA) under Gita be set at 60% for solar activities and 100% for non-solar and solar plus battery energy storage systems.
“Currently, a 100% ITA is given to capital expenditure for eligible green activities for a period of three years while the allowance can be deducted up to 70% from the statutory earnings,” it said in the Budget 2023 appendix released in conjunction with the tabling of the supply bill by Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz in Parliament today.
Meanwhile, it said under Gite, 70% income tax exemption on statutory income for eligible green service activities for a three-year assessment period and income tax exemption of 70% on statutory income for up to 10 years for solar leasing activities will be granted.
The Finance Ministry said it also suggested the tax incentive period for Gita and Gite be extended to five years, from three years, for selected projects and the tax incentive application period to be extended for two years.
“The proposed new effective date for applications received by the Malaysian Investment Development Authority is from January 1, 2024 to December 31, 2025 compared with the tax incentive period of January 1, 2020 to December 31, 2023,” it said.
It added that the proposal is intended to continue supporting the country’s green technology development initiative in line with the Green Technology Master Plan 2017-2030. – Bernama, October 7, 2022
