MOT Seeks Tax Incentives To Encourage Local Shipbuilding, Vessel Repairs

KUALA LUMPUR, Sept 29 (Bernama) -- The Transport Ministry (MOT) has proposed tax incentives under Budget 2027 to encourage more Malaysian vessels to be built and repaired locally, said Transport Minister Anthony Loke Siew Fook.

Loke said that the proposal submitted to the Finance Ministry (MOF) is important as financing is one of the key issues facing the shipping industry, with shipowners continuing to face difficulties in securing funding to finance vessel purchases.

“One of the major challenges faced by a lot of shipowners is how to finance their ships. It’s not easy because most Malaysian banks do not look at this sector as they think it is a very high-risk sector,” he told reporters at a press conference after officiating Malaysia Maritime Week 2026 (MMW2026) here today.

Loke said the ministry hoped government intervention, including through Bank Negara Malaysia, could help improve access to financing for the shipping industry.

He said the government already has a financing scheme for the shipping industry, but industry players have faced challenges in obtaining financing over the years.

However, Loke said the final decision rests with MOF and would only be known when Budget 2027 is tabled on Oct 9, adding that the shipping industry has, over the years, submitted various requests related to taxation and financing to support the sector’s growth.

Earlier in his speech, Loke said that the government has established the Malaysia Shipping Development Fund (MSDF) to promote growth for the industry.

"By establishing this fund under the recently enacted A1551 legislation, we are deploying a strategic financial mechanism to aggressively build up our domestic shipping capacity,” he said.

He said that the MSDF is a mechanism for national resilience, aimed at empowering local operators as well as expanding the Malaysian-flagged fleet.

-- BERNAMA