Tax Exemption Extension To Attract Shipping Firms To Malaysia -- Loke
PUTRAJAYA, 12 Okt (Bernama) -- A 10-year extension of income tax exemptions is expected to encourage more shipping companies to register their vessels in Malaysia rather than in other countries offering tax incentives, Transport Minister Anthony Loke said.
Speaking at a news conference here on Monday, Loke said the income tax exemption for Malaysian shipping companies, covering 2027 to 2036, would provide the maritime sector with greater certainty to plan long-term investments.
Previously, shipping companies had to apply to renew their income tax exemptions every two years, creating uncertainty that discouraged them from making long-term investments, including vessel purchases, he said.
“To attract shipping companies to register their vessels and invest in assets in Malaysia again, this 10-year tax exemption will provide them with the certainty they need,” Loke said.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced the extension of the income tax exemption for Malaysian shipping companies until the 2036 year of assessment when tabling the 2027 Budget, themed “Reaching For The Skies, While Anchored On Our Values”, in the Dewan Rakyat last Friday.
In addition to the tax exemption, the government has introduced fixed stamp duty rates for financing the purchase or construction of vessels, Loke said.
Financing of up to RM100 million will attract stamp duty of RM2,000, while financing exceeding RM100 million will incur a duty of RM5,000.
Previously, stamp duty was charged at 0.5 per cent of the vessel or financing value. This meant financing a vessel worth RM100 million incurred stamp duty of RM500,000.
“Now, the government has set the stamp duty at just RM2,000. For vessel financing of RM100 million, this represents a saving of RM498,000,” Loke said.
He said the substantial reduction would make investment in shipping more attractive and encourage new vessel construction and investment, benefiting both shipping companies and the wider maritime industry.
The measures are expected to spur investment in vessel ownership and boost Malaysia’s domestic shipping and shipbuilding industries, including in Sibu, Sarawak, he added.
Meanwhile, Malaysian Shipowners’ Association (MASA) chairman Mohamed Safwan Othman welcomed the extension, saying it would give shipowners the long-term certainty needed to purchase or build vessels in Malaysia and register them under the Malaysian flag.
“We thank Loke for persistently bringing this issue to the Finance Ministry. After years of history in Malaysia’s shipping industry, we have finally secured a tax exemption for a substantially longer period,” he said.
-- BERNAMA