Budget 2023: Proposal to extend GITA, GITE application period to 2025

KUALA LUMPUR: To encourage green investment to achieve the target of zero net greenhouse gas emissions as early as 2050, the government has proposed an extension of the Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) incentive application period until Dec 31, 2025.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the two incentives will be improved with an incentive period of three to five years for eligible green activities.

"In addition, the Green Technology Financing Scheme (GTFS) will also see improvements with the guarantee value to be increased to RM3 billion until 2025; the scope of financing expanded, especially to the EV (electric vehicle) sector with a guaranteed limit of up to 60 per cent; and the guarantee level for waste sector financing will be increased to 80 per cent," he said when tabling Budget 2023 in the Dewan Rakyat here today.

Tengku Zafrul said Bank Negara Malaysia (BNM) will provide RM1 billion in soft loans under the High-Tech and Green Technology Financing Fund to support innovative sustainable technology start-ups.

The same amount is also allocated under the Low Carbon Transition Facility to help Small and Medium Enterprises (SMEs) implement low carbon practices, he said.

"Through its Impact Fund, Khazanah will provide RM150 million to boost the development of environmentally friendly projects, including supporting the carbon market and restoration of degraded forests.

"In line with this commitment, GENTARI, a subsidiary of PETRONAS has been established to drive clean energy efforts.

"As a start, GENTARI is committed to installing solar panels in government and commercial facilities by 2024 with a cumulative PV capacity of 3 megawatts and providing 500 units of EV charging facilities nationwide," he said.

Meanwhile, he said Tenaga Nasional Berhad is also committed to installing rooftop solar as well as providing EV charging facilities with an investment of RM165 million until 2025.

As a continuous measure to support the use of EVs, the government plans to grant import duty and excise exemptions on imported CBU-type EVs extended until Dec 31, 2024.

It also involves the exemption of Approved Permit (AP) fees for the import of EVs until Dec 31, 2023 while manufacturers of EV charging equipment are given 100 per cent income tax exemption on statutory income from assessment years 2023 to 2032 as well as 100 per cent Investment Tax Allowance.

He said to support the efforts of Pulau Tuba in Langkawi, Kedah as the first low-carbon island in Malaysia, the government will provide a sales rebate of up to RM4,000 to rental motorcycle operators who replace their existing motorcycles with electric motorcycles.

Also, in support of the implementation of government green procurement by 25 percent by 2025, he said the initiative will be expanded to include state governments and local authorities, he added.

"To increase the collection of plastic waste, those who make donations or sponsor the Smart AI-driven Reverse Vending Machines are eligible for income tax deductions.

"The government intends to introduce a carbon tax and will study the feasibility of a carbon pricing mechanism.

"To support its implementation, the government will provide RM10 million in matching grants to help prepare carbon assessments for SME companies as well as eligible related products," he said.

-- BERNAMA