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Review of Tax Incentives for Food Production Project

Updated: Nov 9, 2022

To Download Budget 2023 Speech and some other related publications -

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 Industry (MAFI) 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

.2 Income Tax (Deduction of Investment in New Food Production Project or Expansion Proj

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:

  1. A new project is given income tax exemption of 100% on statutory income for 10 years of assessment; or

  2. An expansion project for an existing company is given an income tax exemption of 100% on statutory income for 5 years of assessment.

172.1 Income Tax (Exemption) (No. 6) Order 2020 [P.U.(A) 373]
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New project

A project which involves the following:

  1. Planting of industrial crops, vegetables, fruits, herbs, spices and cash crops;

  2. Aquaculture;

  3. Rearing of honey and urena lobata bees;

  4. Rearing of cows, buffaloes, goats, sheep and deer;

  5. Deep-sea fishing; and

  6. 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)

Expansion project

A project:

  1. To expand the new project (as above)

  2. Which involves a new area of land; and

  3. Which is approved by the Minister


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 MAFI from 1 January 2023 until 31 December 2025

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