Malaysian manufacturers have started to raise capital expenditures for technological investments despite the associated high costs, enabling them to start venturing into automation and Industry 4.0.

The Government continues to encourage more local companies to produce high value-added products and leverage on automation as well as invest in the upskilling of their talents. Some of the available incentives for companies in this industry include:

• Industry4WRD Intervention Fund
• Domestic Investment Strategic Fund (DISF)
• Automation Capital Allowance (ACA)
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Under the Promotion of Investments Act (PIA), 1986 the incentives offered are as follows:

• Pioneer Status (PS) with income tax exemption of 70% of statutory income for 5 years. OR
• Investment Tax Allowance (ITA) of 60% of qualifying capital expenditure incurred within a period of 5 years. The allowance can be offset against 70% of statutory income in the year of assessment.

Companies in this industry are also eligible for Reinvestment Incentives under the PIA 1986:

• Pioneer Status (PS) with income tax exemption of 70% of statutory income for 5 years. OR
• Investment Tax Allowance (ITA) of 60% of qualifying capital expenditure incurred within a period of 5 years. The allowance can be offset against 70% of statutory income in the year of assessment.