As the world shifts towards sustainable development, Malaysia has been actively promoting green technology adoption across various industries to achieve net-zero greenhouse gas emissions. This is also a goal of the Twelfth Malaysian Plan (2021-2025) reinforced by several government policies, including the New Industrial Master Plan (NIMP) 2030, the National Renewable Energy Roadmap (NETR), and the National Energy Policy for 2022-2040. These policies focus on economic resilience, environmental sustainability, and social inclusivity to drive Malaysia toward a greener future.
In line with these efforts, adopting green technology in industrial construction presents numerous advantages, from reducing environmental impact to enhancing operational efficiency and cost savings. To further encourage businesses to embrace sustainability, the Malaysian government has announced the revision of the Green Technology Tax Incentive for those adopting greetech in Malaysia. This blog explores the available government incentives designed to help industries transition toward more sustainable and eco-friendly operations.
Understanding Green Technology Incentives in Malaysia
The Malaysian government has been actively promoting green technology adoption since 2001, introducing various incentives to encourage investments in sustainable industries, whether for industrial use or personal consumption. Through tax benefits and financial support, the government aims to accelerate the transition toward environmentally friendly solutions.
In line with this commitment, the 2024 National Budget introduced a revised Green Technology Tax Incentive, further enhancing support for businesses and service providers that integrate green solutions into their operations. These revisions reflect Malaysia’s dedication to sustainability, reinforcing policies that drive economic growth while minimizing environmental impact.
Key Government Incentives for Green Technology in the Industrial Sector
To further accelerate the adoption of green technology, here are three Green Technology Tax Incentives designed to support businesses:
1. Green Investment Tax Allowance (GITA) Assets for Own Consumption
GITA Assets offers tax incentives to businesses investing in green technology, such as renewable energy systems, energy-efficient equipment, and waste management solutions. Companies can benefit from a tax allowance of up to 100% on capital expenditure, which can be offset against 70% of statutory income. This incentive applies specifically to businesses adopting technologies listed under the MyHIJAU directory, encouraging industries to integrate sustainable solutions while reducing long-term operational costs.
2. Green Investment Tax Allowance (GITA) Project for Business Purposes
GITA Project is designed for companies providing green technology services or solutions. This includes energy conservation, renewable energy, and green building projects. It offers an Investment Tax Allowance of 100% on eligible qualifying capital expenditure (CAPEX) incurred for three years from the first qualifying CAPEX incurred, which can be offset against 70% of statutory income for each year of assessment.
3. Green Income Tax Exemption (GITE) Solar Leasing
GITE Solar Leasing is designed to encourage businesses to adopt renewable energy solutions without the burden of high upfront investment costs. This incentive supports companies involved in solar leasing by offering an Income Tax Exemption of 70% on statutory income for up to 10 years of assessment. By reducing financial barriers, GITE Solar Leasing makes it easier for businesses to transition to sustainable energy sources, lowering operational costs while contributing to a greener future.
For more information about the tax incentives for green technology in Malaysia, please refer to this PDF.
The Future of Green Technology in Malaysia
Many construction companies in Malaysia are actively contributing to the rise of green buildings by integrating sustainable practices into their projects. Among them, Conwall Construction Industries stands out for its commitment to advancing green technology. By offering a range of innovative solutions and eco-friendly products, Conwall has successfully collaborated with various businesses to develop industrial facilities that prioritize energy efficiency, renewable resources, and environmental sustainability.
With strong government incentives and the continued efforts of construction companies driving the adoption of green technology, the future of sustainable industrial development in Malaysia looks increasingly promising.
Conclusion
The adoption of green technology in Malaysia’s industrial sector is gaining momentum, driven by government incentives and industry commitment to sustainability. With tax benefits such as GITA and GITE, businesses have greater financial support to integrate eco-friendly solutions, reducing costs while contributing to a greener future. As more companies embrace sustainable practices, Malaysia is well-positioned to achieve its environmental goals, ensuring long-term economic resilience and environmental sustainability.
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