MoF proposes GITA, GITE tax incentive review based on tiering approach

KUALA LUMPUR, Oct 7 (Bernama) -- The Ministry of Finance (MoF) has suggested tax incentives for green activities under the Green Investment Tax Allowance (GITA) and the Green Income Tax Exemption (GITE) to be reviewed based on tiering approach.

The ministry said it suggested the investment tax allowance (ITA) under GITA to be 60 per cent for solar activities and 100 per cent for non-solar and solar plus Battery Energy Storage System (BESS).

“Currently, a 100 per cent 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 per cent from the statutory earnings,” it said in the Budget 2023 appendix released in conjunction with the tabling of the Budget 2023 by Minister of Finance Tengku Datuk Seri Zafrul Tengku Abdul Aziz at the parliament today.

Meanwhile, it said under GITE, 70 per cent income tax exemption on statutory income for eligible green service activities for a three-year assessment period and income tax exemption of 70 per cent on statutory income for up to 10 years for solar leasing activities.

MoF 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 is extended for two years.

“The proposed new effective date for applications received by the Malaysian Investment Development Authority is from Jan 1, 2024 to Dec 31, 2025 compared with the tax incentive period of Jan 1, 2020 to Dec 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