Malaysia will offer tax deductions of up to RM5 million to encourage wholly Malaysian-owned automotive suppliers to relocate their operations to the Automotive Hi-Tech Valley (AHTV) in Tanjong Malim, Perak.
Prime Minister Datuk Seri Anwar Ibrahim announced the measure when presenting Budget 2027 in Parliament today as part of plans to develop AHTV into a regional automotive hub.
The deduction covers qualifying relocation expenses incurred between Jan 1, 2027 and Dec 31, 2030. The Budget speech did not specify which expenses would qualify or the application procedures.
DRB-Hicom group managing director Tan Sri Syed Faisal Albar welcomed the incentive, saying it would encourage more local automotive suppliers to establish operations in Tanjong Malim by easing relocation costs.
He said a larger supplier base would strengthen domestic supply chains and support AHTV’s development as a centre for next-generation and energy-efficient vehicles.
Syed Faisal also cited government support for EV charging infrastructure, technical training and industrial productivity as important to AHTV’s long-term development.
EV charging tax incentives reduced
The government will also revise and extend green technology tax incentives until Dec 31, 2030, with lower allowances for companies developing EV charging stations.
Under the detailed Budget 2027 tax measures, the Green Investment Tax Allowance (GITA) for qualifying EV charging station projects will fall from 100% to 60%.
The allowance can be offset against up to 70% of statutory income over five years, compared with 100% previously.
The revised scheme applies to qualifying applications received by the Malaysian Investment Development Authority (Mida) between Jan 1, 2027 and Dec 31, 2030.
Companies purchasing eligible EV infrastructure for their own use will receive a 100% allowance for locally manufactured equipment, against 60% for other qualifying infrastructure. Both categories are subject to a 70% statutory-income offset limit.
The incentives apply to eligible asset purchases from Jan 1, 2027 to Dec 31, 2030, with applications to be submitted to the Malaysian Green Technology and Climate Change Corporation (MGTC) within 24 months of purchase.
50 EV charging facilities planned
Separately, the Malaysian Highway Authority (LLM) will provide 50 EV charging facilities at strategic locations.
The Budget speech did not identify the sites, charging capacities, operators or installation timetable.
LLM will also build 15 motorcycle shelters and install 70 CCTV cameras along the PLUS highway.
Telematics to become mandatory
Commercial vehicles will eventually be required to have telematics systems monitoring speed, location and risky driving behaviour.
The planned systems will also support integration with alcohol-detection devices before drivers begin their journeys.
Implementation will remain voluntary through 2027 while the government develops a driver database for enforcement. No start date has been specified for the mandatory requirement.
