THE Government has begun implementing a new investment incentive system designed to attract higher-quality investments and accelerate the country’s transition towards a high-income, innovation-driven economy.
Deputy Finance Minister Liew Chin Tong said the New Incentive Framework, which took effect on March 1 for the manufacturing sector, will ensure that tax incentives are more targeted and linked directly to economic outcomes.
“The implementation of NIF will also strengthen compliance and assessment mechanisms to ensure that every company that receives tax incentives fulfils their commitments through more systematic coordination,” he told the Dewan Negara on Wednesday.
Liew explained that the framework forms part of the government’s broader strategy to improve productivity, increase income levels, and create more high-paying jobs for Malaysians while promoting development in less developed regions.
Under the new structure, financial and tax incentives will be awarded based on measurable results rather than broad eligibility, reflecting changes in the global economic landscape and the need for more strategic investment policies.
“The government has reassessed the provision of financial and tax incentives to be more targeted, high-impact, and provide optimal economic returns,” he said.
The New Incentive Framework will also introduce stricter evaluation standards to ensure that companies receiving incentives deliver tangible economic benefits. The services sector is expected to adopt the framework in the second quarter of the year.
Liew made the remarks in response to a question from Senator Azahar Hassan regarding efforts to streamline financial and tax incentives in order to attract quality investments and generate high-value employment.
Under the revised system, the rate, type and duration of incentives will be determined through an outcome-based approach guided by the National Investment Aspirations Scorecard.
“Key evaluation criteria include economic complexity, high-value job creation, strengthening local value chains, development of new and existing clusters, increased inclusivity, and environmental, social and governance practices,” Liew said.
“This approach ensures that the incentives provided directly support high-quality investments and create more high-income jobs for Malaysians.” - March 11, 2026
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