KUALA LUMPUR – Tax policies and strategies must play a role in encouraging corporations to embrace and implement environmental, social, and governance (ESG) policies, said caretaker finance minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz.
He noted that Malaysia has adopted the 2030 Agenda for Sustainable Development, which includes priorities to reduce greenhouse gas emissions by 45% of gross domestic product by 2030.
“We are also committed to achieving carbon neutrality by 2050 and have urged all government-linked investment companies, as well as government-linked companies, to set similar net-zero targets,” he said in his keynote speech at the 51st Study Group on Asia-Pacific Tax Administration and Research Annual Meeting 2022 here today.
To support this effort, he said, the government is working towards carbon taxation and studying the feasibility of a carbon pricing mechanism.
“We have also proposed extending the green investment tax allowance and green income tax exemption for eligible green activities, and we expanded these to include solar and battery energy storage systems,” he said.
Tengku Zafrul also said that the government is committed to sustainability beyond the environment in the broadest sense, in line with the United Nations’ Sustainable Development Goals (SDGs) which are targeted to be achieved by 2030.
“Aligned to the SDGs, the government targets to eliminate hardcore poverty and towards this, we propose in Budget 2023 to set aside RM1 billion focused on helping very poor households to improve their earnings,” he explained.
Tengku Zafrul also pointed out that Malaysia has progressed well in education as women currently outnumber men in terms of enrolment into universities.
“However, in the labour force, female labour force participation remains relatively low at 55.7% compared to male labour force participation at 82.6 per cent, mainly due to women leaving the workforce to care for family,” he said.
Towards supporting working mothers, he said, Budget 2023 has proposed a RM3,000 tax relief for childcare expenses and also a tax exemption on income for women returning to work after a career break.
Tengku Zafrul also emphasised that tax administrations bear enormous responsibility for ensuring that a country’s financial position is adequate to fund the government’s planned spending.
“As such, tax administrations must be quick to adapt to changing socioeconomic conditions and new norms when conducting tax operations,” he added. – Bernama, October 18, 2022
