Mida gives 187 firms tax incentives to move into automation

Mida’s strategic planning and development senior executive director Ahmad Khairuddin Abdul Rahim.

KUALA LUMPUR: The Malaysian Investment Development Authority (Mida) has approved 187 applications for tax incentives from labour-intensive industries venturing into automation.

Mida’s strategic planning and development senior executive director Ahmad Khairuddin Abdul Rahim said 212 applications had been received and that another 25 were pending approval.

Known as the automation capital allowance (CA), the incentive was introduced in the Budget 2015 to encourage manufacturers to engage in innovative and productive activities and expedite adoption of automation.

For high labour-intensive industries (rubber products, plastics, wood, furniture and textiles), an automation CA of 200% is provided on the first RM4 million expenditure incurred within three years of assessment from 2015 to 2017.

For other industries, automation CA of 200% is provided on the first RM2 million expenditure incurred within five years of assessment from 2015 to 2020.

Speaking at a media briefing here today, Ahmad said Mida was targeting a total of 300 companies to apply for the automation CA by the end of this year and an additional 100 next year.

“The government’s objective to introduce automation CA is to accelerate the adoption of automation and it will end in 2020. We can only get an extension in the 2021 Budget.

“This incentive not only urges manufacturing companies to engage in innovation and productive activities, but to also spearhead quick adoption of automation to enhance productivity in the local manufacturing industry,” he said.

Ahmad said Mida had done 20 outreach programmes from 2016 to July 2019 to promote the automation CA.