Tax policies key to encouraging corporations to embrace ESG - Tengku Zafrul

He noted that Malaysia has adopted the 2030 Agenda for Sustainable Development, which includes priorities to reduce greenhouse gas emissions by 45 per cent of Gross Domestic Product by 2030.

"We are also committed to achieving carbon neutrality by 2050 and have urged all government-linked investment companies, as well as government-linked companies, to set similar net-zero targets," he said in his keynote speech at the 51st Study Group on Asia-Pacific Tax Administration and Research (SGATAR) Annual Meeting 2022 here today.

To support this effort, he said, the government is working towards carbon taxation and studying the feasibility of a carbon pricing mechanism.

"We have also proposed extending the Green Investment Tax Allowance and Green Income Tax Exemption for eligible green activities, and we expanded these to include solar and battery energy storage systems," he said.

He also said that the government is committed to sustainability in the broadest sense beyond environment and in line with the United Nations' Sustainable Development Goals (SDGs) which are targeted to be achieved by 2030.

"Aligned to the SDGs, the government targets to eliminate hardcore poverty and towards this, in Budget 2023 we propose to set aside RM1 billion focused on helping the very poor households to improve their earnings," he explained.

Tengku Zafrul also pointed out that Malaysia has progressed well in education where currently for enrolment into universities, women outnumber men.

"However, in the labour force, female labour force participation remains relatively low at 55.7 per cent compared to male labour force participation of 82.6 per cent, mainly due to women leaving the workforce to care for family," he said.

Towards supporting working mothers, he said, Budget 2023 has proposed a RM3,000 tax relief for childcare expenses and also a tax exemption on income for women returning to work after a career break.

Tengku Zafrul also emphasised that tax administrations bear enormous responsibility for ensuring that a country's financial position is adequate to fund the government's planned spending.

"As such, tax administrations must be quick to adapt to changing socioeconomic conditions and new norms when conducting tax operations," he added.