The Malaysian Photovoltaic Industry Association (MPIA) strongly commends the Government’s foresight in introducing green technology incentives in the form of the Investment Tax Allowance (ITA) and Income Tax Exemption (ITE) that will spur the growth of the country’s green economy.
The incentives, introduced by the Ministry of Energy, Green Technology and Water (KeTTHA) and jointly implemented by Malaysia Green Technology Corporation (GreenTech Malaysia) and Malaysian Investment Development Authority (MIDA), enable companies to claim tax allowance for the purchase of green technology equipment/assets and for green technology service providers to claim tax exemption.
President of the MPIA, Ahmad Shadzli Abdul Wahab said, “The MPIA welcomes the green technology incentives by the Government. We view ITA and ITE as a great boost for the industry as these incentives would further strengthen the solar energy sector and solidify the foundation for Malaysia to be a green technology hub in the region.”
“From our study, the fact that the ITA would reduce net investment cost on green assets by up to half and speed up return on investment is indeed very attractive from an industry’s standpoint. We are optimistic this will drive demand for green innovations, attracting investors to strongly consider Malaysia as a strategic market for developing and marketing green technology solutions,” he added.
MPIA will be discussing further with its 90 members and also with the Asian Photovoltaic Industry Association, which comprises members from China, Hong Kong, Taiwan, Japan, Korea and Singapore, on how to capitalise on these green incentives at the upcoming International Greentech & Eco Products Exhibition & Conference Malaysia (IGEM 2016), to be held from 5th to 8th October at KLCC.
The recent announcement stipulates 100% ITA specifically for qualifying capital expenditure incurred on green technology projects or the purchase of green technology assets that are listed under the MyHIJAU Directory. This Directory is a one-stop centre for internationally and locally certified green products and services. To be eligible for ITA, companies must minimise the degradation of the environment or reduce greenhouse emissions; promote health and improvement of the environment; and conserve the use of energy and/or other forms of natural resources, or promote the use of renewable energy (RE), or is able to recycle waste material resources.
As for the 100 per cent ITE, businesses should offer green technology services that support the implementation and operation of green technology projects. Eligible services include system integration of RE; energy services; services related to green building/data centre, green certification of products, equipment and building; as well as a green township.