The Federal Government offers Tax Incentives, both Direct and Indirect, under the Promotion of Investments Act 1986, Income Tax Act 1967, Customs Act 1967, Sales Tax Act 1972, Excise Act 1976 and Free Zones Act 1990.
These Acts cover investments in the manufacturing, agriculture, tourism and approved services sectors as well as R&D, training and environmental protection activities.
The direct tax incentives grant partial or total relief from the income tax payment for a specified period, while indirect tax incentives come in the form of exemptions from import duty, sales tax and excise duty.
Inter-alia, the incentives given by the Federal Government are:
Incentives for Manufacturing Sector
Incentives for a Knowledge-Based Economy
Incentives for Operational Headquarters (OHQ)
The additional benefits that Sarawak enjoys from the Federal Government under the Eastern Corridor Package are summarized as follows.
Incentives for Regional Distribution Centres (RDC)
Incentives for International Procurement Centres (IPC)
Incentives for Representative Offices and Regional Offices
General Incentives
In addition, the Federal Government accommodates and provides additional tax incentives for industrialists investing in manufacturing sector under the “promoted activities” or “promoted products” in Sarawak. Applications can be made to Malaysia Industrial Authority (MIDA) for eligibility of Pioneer Status (PS) or Investment Tax Allowance (ITA) and other customized investment packages.
The additional benefits that Sarawak enjoys from the Federal Government under the Eastern Corridor Package are summarized as follows:
The State Government offers generous incentives in term of the competitive price of land, low down payment for the purchase of industrial land, cheap electricity and other facilities to ensure that start-up and operating costs for companies are competitive.
In order to encourage investors to invest in Sarawak, the State Government gives the following additional incentives:
These Acts cover investments in the manufacturing, agriculture, tourism and approved services sectors as well as R&D, training and environmental protection activities.
The direct tax incentives grant partial or total relief from the income tax payment for a specified period, while indirect tax incentives come in the form of exemptions from import duty, sales tax and excise duty.
Inter-alia, the incentives given by the Federal Government are:
Incentives for Manufacturing Sector
- Incentives for Manufacturing Companies
- Incentives for High Technology Companies
- Incentives for Strategic Projects
- Incentives for Small and Medium Scale Companies
- Incentives for Strengthen Industrial Linkages
- Incentives for the Machinery and Equipment Industry
- Enhanced Incentives for Utilization of Oil Palm Biomass
- Additional Incentives for the Manufacturing Sector
- Main incentive for the Agricultural Sector
- Additional incentive for the Agricultural Sector
- Main Incentives for the Tourism Industry
- Additional Incentives for the Tourism Industry
- Incentives for Forest Plantation Projects
- Incentive for Storage, Treatment & Disposal of Toxic & Hazardous Wastes.
- Incentives for Energy Conservation.
- Incentives for Waste Recycling Activities.
- Incentives for Use of Renewable Energy Resources.
- Additional Incentives for Environment Management.
- Main Incentives for Research and Development
- Additional Incentives for Research and Development
- Main Incentives for Training
- Additional Incentives for Training
- Main Incentives for Information and Communication Technology
- Additional Incentives for Information and Communication Technology
- Main Incentives for Approved Service Projects
- Additional Incentives for Approved Service Projects
- Tax Exemption for Shipping Operations
- Exemption for Import Duty and Sales Tax on Prime Movers and Trailers
- Pioneer Status
- Investment Tax Allowance
Incentives for a Knowledge-Based Economy
Incentives for Operational Headquarters (OHQ)
The additional benefits that Sarawak enjoys from the Federal Government under the Eastern Corridor Package are summarized as follows.
Incentives for Regional Distribution Centres (RDC)
Incentives for International Procurement Centres (IPC)
Incentives for Representative Offices and Regional Offices
General Incentives
- Industrial Building Allowance
- Infrastructure Allowance
- Tariff Related Incentives
- Incentives for Exports
- Training Incentives
- Incentives for Acquiring Proprietary Rights
- Incentives for Acquiring a Foreign-Owned Company
- Incentives for the Use of Environment Protection Equipment
- Donations for Environment Protection
- Incentive for Employees' Accommodation
- Incentive for Employees' Child Care Facilities
In addition, the Federal Government accommodates and provides additional tax incentives for industrialists investing in manufacturing sector under the “promoted activities” or “promoted products” in Sarawak. Applications can be made to Malaysia Industrial Authority (MIDA) for eligibility of Pioneer Status (PS) or Investment Tax Allowance (ITA) and other customized investment packages.
The additional benefits that Sarawak enjoys from the Federal Government under the Eastern Corridor Package are summarized as follows:
Additional Incentives for Manufacturing Sector Given by Federal Government
*MIDA – Malaysian Industrial Development Authority | Peninsular Malaysia | AddedIncentive forSarawak | Application | |
| Pioneer Status (PS) | 70% tax exemption on statutory income for 5 years | 100% tax exemption on statutory income for 5 years | Submit to MIDA* |
| Investment Tax Allowance (ITA) | 60% allowance on the qualifying capital expenditure incurred within 5 years The allowance could be utilized to offset 70% of statutory income for each year of assessment. | 100% allowance on the qualifying capital expenditure incurred within a period of 5 years. The allowance could be utilized to offset against 100% of statutory income for each year of assessment. | Submit to MIDA |
| Reinvestment Allowance (RA) | 60% allowance on qualifying capital expenditure incurred, and could be utilized to offset 70% of statutory income for each year of assessment. | Free to offset RA against 100% of statutory income. | Submit to Inland Revenue Board |
| Other Incentives | Infrastructure Allowance of 85% of statutory income in the year of assessment. | Infrastructure Allowance of 100% of the qualifying expenditure.
Double deduction on freight charges incurred for exporting rattan and wood-based products (excluding sawn timber and veneer). |
Submit to MIDA |
The State Government offers generous incentives in term of the competitive price of land, low down payment for the purchase of industrial land, cheap electricity and other facilities to ensure that start-up and operating costs for companies are competitive.
In order to encourage investors to invest in Sarawak, the State Government gives the following additional incentives:
Additional Incentives for Manufacturing Sector given by Sarawak State Government
| Incentives | |
| Industrial Land | 30%-50% rebate for industrial land if project is satisfactorily completed and started operation within 36 months from date of alienation of land.The rate at the Sama Jaya Free Industrial Zone is RM2.50 per sq. ft. |
| Log Export Quota Policy | Of total log harvested from Permanent Forest Estates, 60% for local processing and balance of 40% for export. |
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