KUALA LUMPUR: Investment, Trade and Industry Ministry will announce details of the new Investment Incentive Framework in the first quarter of next year (1Q25).
Its minister Tengku Datuk Seri Zafrul Abdul Aziz said work on the framework has already begun this year and will be presented at the National Investment Council in December.
He added that there are several reasons why the framework needs to be reviewed. This includes the need to update how investments are assessed.
He noted that investments entering the country must add value to the economic sector by benefiting local companies and providing quality job opportunities.
Tengku Zafrul said in terms of sustainability, investments must be in sectors that do not produce high carbon emissions.
"Furthermore, we must also be prepared as Malaysia is one of the countries that agreed to implement a global minimum tax of 15 per cent next year," he told reporters after announcing the ministry's report card for the third quarter of 2024 here today.
"Therefore, we can no longer attract investments by offering tax exemptions of up to zero percent, and there must be other incentives such as focusing on talent and green sectors.
"So fundamentally, it is a new way to look at incentives. Incentives can no longer be given in bulk but must be targeted at industries that can genuinely help enhance the country's economic value," he added.
The government announced the framework during the presentation of the 2025 Budget last Friday.
It will focus on high-value activities instead of existing product-based incentives and is set to be implemented in 3Q25.
Thge framework aims to enhance diversity in the electrical and electronic sector through high-value-added activities such as integrated circuit (IC) design services and advanced materials, along with tax incentives to promote exports related to IC design activities.