Update: The Ismail Sabri Government Budget is no longer applicable. Malaysia's national budget for 2023 was re-tabled again in February 2023.
To Download Revised Budget 2023 Speech and some other related publications - https://www.ccs-co.com/post/budget-2023-malaysia-madani
Current Position
Certain food production projects, including the planting of vegetables, fruits, kenaf, herbs or spices; the rearing of cows, buffaloes, goats or sheep; and aquaculture and deep-sea fishing, are eligible for certain tax incentives, provided that applications were received by the Ministry of Agriculture and Food Security (MAFS) by December 31, 2022.
Tax incentives for food production projects are given under the:-
Income Tax (Deduction of Investment in New Food Production Project or Expansion Project) Rules 2020 [P.U.(A) 374]
Income Tax (Exemption) (No. 6) Order 2020 [P.U.(A) 373]
Income Tax (Deduction of Investment in New Food Production Project or Expansion Project) Rules 2020 [P.U.(A) 374]
An investment company that undertakes investment in a subsidiary company engaging in a new food production project is given a tax deduction equivalent to the amount of investment made in the basis year the investment is made; and
Income Tax (Exemption) (No. 6) Order 2020 [P.U.(A) 373]
A qualified person (which includes companies, sole proprietorships, partnerships and associations solely engaged in agriculture or fishery) that is resident in Malaysia and is engaging in food production projects is exempted from the payment of income tax in relation to:
A new project is given income tax exemption of 100% on statutory income for 10 years of assessment; or
An expansion project for an existing company is given an income tax exemption of 100% on statutory income for 5 years of assessment.
New project
A project which involves the following:
Planting of industrial crops, vegetables, fruits, herbs, spices and cash crops;
Aquaculture;
Rearing of honey and urena lobata bees;
Rearing of cows, buffaloes, goats, sheep and deer;
Deep-sea fishing; and
Planting of feed mill (cultivated in a project which has been identified by the Minister charged with the responsibility of that project and approved by the Minister)
In year 2021, the scope of the food production project was expanded to planting of seeds for agro-food and high seas fishing projects.
Expansion project
A project:
To expand the new project (as above)
Which involves a new area of land; and
Which is approved by the Minister
Proposal
To further promote the participation of industry players in the agriculture sector and to ensure the security of domestic food supply, it is proposed tax incentives be reviewed as follows:
scope of tax incentives is expanded to include agricultural-based projects on Controlled Environment Agriculture (CEA); and
the tax incentive is extended for 3 years.
Effective Date
For applications received by MAFS from 1 January 2023 until 31 December 2025
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