CAPITALISE ON ADDITIONAL RA TO REINVEST NOW - MIDA

KUALA LUMPUR, May 27 (Bernama) -- Malaysian companies should seize the opportunity to reinvest in the country, riding on the additional reinvestment allowance (RA) offered for assessment years 2020-2024.

The Malaysian Investment Development Authority (MIDA) deputy chief executive officer for Investment Promotion and Facilitation, Sivasuriyamoorthy Sundara Raja said the additional RA initiative was announced under the National Economic Recovery Plan (Penjana). 

The RA is an incentive to encourage companies to reinvest and expand their businesses.

A resident company in operation for not less than 36 months that incurs capital expenditure to expand, modernise, automate, or diversify its existing manufacturing business or approved agricultural project is entitled to the RA.

The allowance is given for 15 years, starting from the first year of claim, based on 60 per cent of capital expenditure incurred for the qualifying project.

Speaking at the ‘How to Revive Domestic Direct Investment?’ forum by the National Chamber of Commerce and Industry of Malaysia (NCCIM), Sivasuriyamoorthy said there has been a misconception among companies that the government was overfocusing and incentivising foreign investors rather than local players.

He said that domestic players enjoy more investment incentives compared to foreign investors, and emphasised that domestic investments have been a major contributor to approved investments in the economy.

According to him, from 2012 to 2021, approved domestic investments accounted for RM1.3 trillion or 64 per cent of total approved investments.

Sivasuriyamoorthy said during the period, Domestic Direct Investments (DDIs) dominated the services sector at 84.2 per cent or about RM1.01 trillion, while Foreign Direct Investments (FDIs) accounted for 15.8 per cent or RM190.4 billion.

Conversely, the manufacturing sector was mainly dominated by FDIs at 64.5 per cent or RM527.6 billion, while DDIs stood at 35.5 per cent or RM290.8 billion.

“We acknowledge that we need to do more in this area, we need to get more Malaysian companies to invest in the manufacturing sector.

“In the services sector, a lot of the investments goes to real estate and other service activities,’’ he said.

He added that MIDA has also requested additional funds for the Smart Automation Grant, Automation Capital Allowance (Automation CA) and Industry4WRD Intervention Fund allocated for local companies.

-- BERNAMA