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BUSINESS

Special Tax Cuts, Incentives To Spur Investments In Less Developed Areas

06/03/2018 07:50 PM
KUALA LUMPUR, March 6 (Bernama) -- Special tax cuts and incentives from the government are available for companies to set up their operations in the lesser developed parts of Malaysia, said Minister of International Trade and Industry (MITI), Datuk Seri Mustapa Mohamed.

Mustapa said MITI and its agency for the promotion of the manufacturing and services sectors, the Malaysian Investment Development Authority (MIDA), had a long list of incentives to spur the mission. 

"It is our desire and policy to spread the fruit of development, including manufacturing, to as many parts  of the country as possible so that it is not concentrated in hot investment areas of Klang Valley, Johor and Penang.

"Special incentives for the lesser develop parts of Malaysia, such as a double-tax deduction are readily available for companies to relocate their operations to the lesser developed parts of Malaysia," he said during presentation of ?Malaysia Investment Performance Report 2017' here today.

According to the report, more and more global companies were making Malaysia their hub last year.

It said the companies included Osram Opto Semiconductors, the world's most advanced light-emitting diode chip factory; B.Braun's Global Centre of Excellence for Intravenous Access products, which comprises production and research and development functions; Peugeot's ASEAN manufacturing hub; IKEA's Regional Distribution and Supply Chain Centre for ASEAN; Honeywell's ASEAN Regional Headquarters;  and, Schlumberger, which made Malaysia their largest shared services hub in the group in addition to their procurement service centres, human resource hubs, financial hub and two regional hubs.

In terms of investment by state last year, Johor was the highest recipient of approved investments (RM21.9 billion); Penang (RM10.8 billion); Sarawak (RM10.5 billion); Selangor (RM5.6 billion); and, Melaka (RM4.7 billion), it said. 

The report said these five states contributed 84 per cent of the total investments approved in 2017. 

Mustapa said that in investment, the infrastructure and connectivity were important elements, thus project such as the East Cost Rail Link (ECRL) would help spur development in the East Coast of Peninsular Malaysia.

Meanwhile, MIDA's Chief Executive Officer, Datuk Azman Mahmud, said for 2018, MIDA would collaborate with each state's agency in its ?Invest Series' programmes to further promote the unique comparative and competitive advantages of the states and to-date, it has undertaken four sessions covering Perlis, Kedah, Kelantan and Pahang.

"The incentives for operation in less developed areas throughout the country are open for both foreign or local companies.

"On the location, sometimes they (the companies) identified and sometimes we (MIDA) also show them where are the less developed areas that we can consider," he said at a press conference after the Investment Performance Report 2017 presentation. 

He said besides the Domestic Investment Strategic Fund of RM1 billion to accelerate the shift of Malaysian-owned companies in targeted industries to high value-added, high technology, knowledge-intensive and innovation-based industries, MIDA also offered several types of incentives for investment and operation at less developed area, which included a 100 per cent income tax exemption up to 15 years of assessment depending on the investment proposal.

Other incentives included an investment tax allowance for capital expenditure incurred within 10 years and withholding tax exemption on fees for technical advice, assistance or royalty in relation to manufacturing or services activities, he said. 

He said the stamp duty exemption on transfer or lease of land or building, and an import duty exemption on raw materials, components, machinery and equipment directly used in activities for selected services sub sectors were also among the incentives currently offered by MIDA.

-- BERNAMA


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