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Govt plans initiatives to woo businesses into ESG efforts

Govt plans initiatives to woo businesses into ESG efforts

18 Oct 2022

Plans for carbon taxation and a carbon pricing mechanism are being considered to encourage businesses to play a bigger role in helping Malaysia achieve its environmental sustainability goals, finance minister Tengku Zafrul Aziz said today.

He noted that Malaysia has adopted the 2030 agenda for sustainable development, where one objective is to reduce greenhouse gas emission by 45% of gross domestic product (GDP) by 2030.

Apart from that, Malaysia is also committed to achieving carbon neutrality by 2050.

To achieve those objectives, there have to be tax policies and strategies to encourage corporations to embrace and implement environmental, social and governance (ESG) requirements, he said in his keynote speech at the 51st study group on Asia-Pacific tax administration and research annual meeting 2022 here today.

He said government-linked investment companies and government-linked companies have been urged to set similar net-zero carbon targets.

“We have also proposed extending the green investment tax allowance and green income tax exemption for eligible green activities, and we have expanded these to include solar and battery energy storage systems,” he said.

He also said the government is committed to sustainability in the broadest sense beyond environment and in line with the United Nations’ sustainable development goals (SDGs) which are targeted to be achieved by 2030.

“In line with the SDGs, the government wants to eliminate hardcore poverty and towards this end, we have proposed in Budget 2023 to set aside RM1 billion to help the very poor households to improve their earnings,” he explained.

Tengku Zafrul also pointed out that Malaysia has progressed well in education where currently women outnumber men in enrolment into universities.

“However, in the labour force, women’s participation remains relatively low at 55.7% compared to male labour force participation of 82.6%, mainly due to women leaving the workforce to care for their 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 socio-economic conditions and new norms when conducting tax operations,” he added.

Source: Free Malaysia Today