Govt Proposes 60 Pct Tax Exemption For Smart Logistic Companies - MoF

KUALA LUMPUR, Oct 18 (Bernama) -- The government is proposing an income tax exemption equivalent to an investment tax allowance of 60 per cent on eligible capital expenditure for five years, to be offered to Smart Logistic Complex (SLC) companies, according to the Ministry of Finance (MoF).

The ministry said the proposal aims to improve supply chain efficiency through the adoption of advanced technology in logistics, including automation incorporating elements of the fourth industrial revolution (IR4.0) such as internet of things (IoT), artificial intelligence (AI) and blockchain.

"This allowance can be deducted up to 70 per cent of statutory income each year, subject to conditions," said the MoF in an appendix issued alongside the Budget 2025 presentation today.

SLCs are modern warehousing facilities using technologies like the IoT and AI to automate operations, reduce costs, and enhance supply chain performance.

According to the MoF, eligible SLC companies include 'investors and operators' who invest in smart warehouse construction and perform qualified logistics activities, or SLC operators who lease smart warehouses long-term, for at least 10 years, and provide qualified logistics services.

"Qualified logistics services include regional distribution centres, integrated logistics services, hazardous goods storage, and cold chains," the ministry added.

Other conditions include a warehouse area of at least 30,000 square metres, the adoption of at least three IR4.0 elements, and other specified criteria, according to the MoF.

The MoF stated that applications for these incentives, to be submitted to the Malaysian Investment Development Authority (MIDA), will be accepted from Jan 1, 2025 to Dec 31, 2027.

For Integrated Logistic Services (ILS) companies, the tax incentive will take the form of pioneer status, providing a 70 per cent statutory income tax exemption for five years or an investment tax allowance of 60 per cent on eligible capital expenditure over five years.

The MoF also noted that automation tax incentives are available for the services sector, with accelerated capital allowances and income tax exemptions equivalent to investment tax allowances for companies investing in machinery and automation equipment with IR4.0 elements.

"The capital expenditure eligible for tax incentives is up to RM10 million, and applications must be submitted to MIDA by Dec 31, 2027," added the MoF.

-- BERNAMA