MITI will bring industry calls for reinvestment allowance improvements to the finance ministry’s attention, says deputy minister.
MELAKA: The Ministry of Investment, Trade and Industry (MITI) is currently looking at issues related to the reinvestment allowance (RA) and will bring them to the attention of the Finance Ministry (MoF) following the business community’s call for improvements to the incentive to encourage greater corporate reinvestment.
Deputy Investment, Trade and Industry Minister Sim Tze Tzin said the RA incentive falls under the MoF’s jurisdiction, and any decision regarding an extension of the incentive period or policy changes is subject to the consideration of the ministry and the tax authorities.
“MITI will help in conveying the voice of the business community to the MoF. However, the final decision rests with the MoF and the Inland Revenue Board,” he told reporters after holding a dialogue session with Melakan entrepreneurs in Banda Hilir, Melaka, today.
He said that the RA is not intended to be a permanent incentive, noting that the current eligibility period is already long. Any proposal to extend it further, such as from 15 years to 20 years, would need to be studied by the MoF.
On a separate matter, Sim said the services sector contributed 51.4% to Melaka’s economy, driven mainly by the tourism industry, which has also helped strengthen the performance of the country’s services sector.
He explained that Malaysia recorded a surplus in services trade for the first time in 2025, after experiencing deficits since 2011, reflecting the sector’s positive progress.
“MITI, together with the Malaysian Investment Development Authority (MIDA), Export-Import Bank of Malaysia Bhd (EXIM Bank), and Malaysian Industrial Development Finance Bhd, will continue to assist companies in Melaka in improving productivity, adopting automation, and meeting environmental, social and governance (ESG) certification requirements to penetrate international markets,” he said.
Additionally, Sim said, Melaka recorded RM12.1 billion in approved investments in the manufacturing and services sectors in 2025, a significant increase from RM2.3 billion in 2020, describing it as the state’s strongest investment record to date.
He said this performance indicates that Melaka’s economy is on a positive trajectory, supported by a declining unemployment rate and strong investment growth.
“All of this is the result of political and economic stability, demonstrating how crucial these elements are for our future. We hope this momentum can be sustained so that the socio-economic growth of both the state and federal governments continues to progress,” he added.
