Hanoi:A 10-year extension of income tax exemptions is expected to encourage more shipping companies to register their vessels in Malaysia, according to Transport Minister Anthony Loke. This extension, covering the years 2027 to 2036, aims to provide the maritime sector with greater certainty for long-term investment planning.
According to BERNAMA News Agency, Loke emphasized that the previous requirement for shipping companies to renew their income tax exemptions every two years created uncertainty, which discouraged long-term investments, including vessel purchases. The new decade-long exemption is intended to offer the stability needed to attract shipping companies to register their vessels and invest in Malaysian assets.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced the extension while presenting 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 vessel purchases or construction. Financing up to RM100 million will now attract a stamp duty of RM2,000, while amounts exceeding RM100 million will incur a duty of RM5,000, significantly reducing costs compared to the previous 0.5% fee.
Loke highlighted that this substantial reduction in stamp duty would make investment in shipping more attractive, encouraging new vessel construction and investment, which would benefit shipping companies and the broader maritime industry. These measures are also expected to boost Malaysia's domestic shipping and shipbuilding industries, including in Sibu, Sarawak.
The Malaysian Shipowners' Association (MASA) chairman, Mohamed Safwan Othman, welcomed the extension, stating it would provide shipowners with the long-term certainty necessary to purchase or build vessels in Malaysia and register them under the Malaysian flag. He expressed gratitude to Loke for his persistent efforts in addressing this issue with the Finance Ministry, resulting in a longer-term tax exemption for the shipping industry.