Companies producing ‘promoted product’ or engaged in ‘promoted activities’ as listed in Appendix I are eligible to apply for the following incentives under the Promotion of Investment Act, 1986 and the Income Tax Act, 1967:

1. Pioneer Status (PS)

• A pioneer status company in Sarawak enjoys partial exemption from the payment of income tax. It will pay on only 15% of their statutory income for five years, commencing from production day.

 

2. Investment Tax Allowance (ITA)

• As an alternative to Pioneer Status, a company granted ITA in Sarawak gets an allowance of 80% on qualifying capital expenditure incurred within five years from the date on which the first qualifying capital expenditure is incurred.

• can offset the allowance against 85% of statutory income in the year of the assessment.

• Any unutilized allowance can be carried forward to subsequent years.

• Qualifying capital expenditure for ITA covers the following:-

- Planting of crops.

- Clearing and preparation of land.

- Provision of plant and machinery used for crop cultivation, animal farming, aquaculture, inland or deep-sea fishing and other agriculture or pastoral pursuits.

- Construction of access roads & bridges.

- Construction or purchase of buildings, structural improvements on land and other structures used for the above purposes.

- Integrated agriculture projects are eligible for ITA for an additional five years on expenditures incurred for processing/manufacturing operations.

Applications for the above incentives should be submitted to the Malaysian Industrial Development Authority (MIDA).