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Tax Deduction for Sponsorship of Smart Artificial Intelligence (AI)-Driven Reverse Vending Machine

Updated: Jul 15, 2023

Update: The Ismail Sabri Government Budget is no longer applicable.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 -

Current Position

In December 2021, the Malaysia Plastic Sustainability Roadmap, 2021–2030 (hereinafter “the Roadmap”) was published in Malaysia. The Roadmap identifies strategies and concrete action plans for achieving plastic circularity within the country.

The Roadmap presents the concept and mechanism of a circular economy and analyzes the current state of policy measures, regulations, technologies, R&D, and economics with regard to the entire life cycle of plastics from production to disposal, outlining responding action plans.

This road map is intended to serve as a set of guidelines for all relevant stakeholders in ensuring sustainability throughout the plastic value chain, with the end goal being the creation of new value that is beneficial to society and the environment.

Three objectives for controlling plastics as set out in the Roadmap are:

  • To sustainably address plastic pollution in Malaysia, ensuring economic development, environmental protection and societal wellbeing;

  • To provide guidance and promote sustainable business practices in ensuring plastics circularity and sustainability through circular economy approach; and

  • To harmonise actions along plastic value chain through adoption of life cycle approach.

Following this road map, the government's objective is to maximise the percentage of plastic collected for recycling to 40% by 2025.

Tax deductions under Section 34(6)(h) of the Income Tax Act 1967 can be given to any relevant person who carries out community projects that provide significant benefits to the public in Malaysia related to the fields of education, health, housing, infrastructure, information and communication technology or maintenance of a building designated as a heritage site, projects to increase the income of the poor as well as environmental preservation/conservation projects.

Approval requirements include:

  1. projects benefiting only the public in Malaysia without having any interest in contributors; and

  2. projects that are voluntarily contributed and are not required by the authorities under any regulation.


To support the recycling of plastic waste as an economic resource and to ensure the collected-for-recycling rate can be increased through a more effective and organised plastic waste collection programme, it is proposed that tax deduction under Section 34(6)(h) of the Income Tax Act 1967 be given to companies and other than companies (individuals, partnerships, trusts and cooperatives that have business income) that make donations or sponsorships of Artificial Intelligence (AI) - Driven Reverse Vending Machine.

Effective Date

For contribution/sponsorship and application received by the Ministry of Finance from 1 April 2023 until 31 December 2024.

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