Malaysia's Budget 2025: A Commitment to Sustainability

Malaysia's Budget 2025 demonstrates a strong commitment to environmental, social, and governance (ESG) principles, aiming to cultivate a sustainable and resilient economy. The budget introduces various initiatives designed to promote reduce carbon emissions, and support sustainable practices across multiple sectors.

Summary of Key Initiatives

A notable feature of Budget 2025 is the introduction of a carbon tax set to take effect by 2026, targeting key industries such as iron, steel, and energy. This initiative aligns with global efforts to combat climate change and encourages businesses to adopt low-carbon technologies.

Additionally, the budget provides tax incentives for Carbon Capture, Utilisation, and Storage (CCUS) initiatives. Companies engaged in CCUS will benefit from investment tax allowances or income tax exemptions, fostering innovation and investment in carbon reduction technologies.

The extension of the Net Energy Metering (NEM) programme until June 2025 further supports the adoption of renewable energy by encouraging the installation of solar photovoltaic systems on rooftops.

Preparing for ESG and Sustainability with Tax Measures

To effectively navigate the new landscape of ESG-focused taxation, consider the following steps:

1. Monitor Policy Developments: Stay informed about the latest policy announcements and regulatory changes affecting ESG-related activities. Understanding evolving requirements ensures timely adaptation to comply with new rules.
2. Seek Help from the Right Expert: Engage with professionals in ESG and sustainability consulting who are familiar with ESG-related finance and taxation. Their expertise can help you navigate the complexities of the new tax measures and ensure you maximise the benefits available for your sustainability initiatives.
3. Strategic Planning: Plan your company’s response to these tax incentives strategically. Identify areas where you can most efficiently utilise these benefits to drive sustainability initiatives forward while minimising any potential disruptions.

Budget 2025 positions Malaysia as a leader in the region’s sustainability efforts by providing a robust framework and support for ESG initiatives. By embracing these changes and preparing accordingly, businesses can not only contribute to a greener economy but also enhance their competitive edge in an increasingly eco-conscious market and low-carbon future. Click the link below to read more about ESG and sustainability-related tax measures in Budget 2025.

New Resources

Navigating the Future of CCUS in Malaysia: Insights from Global Case Studies

5步骤让企业实现有效ESG

BBC News

We Introduced Sustainable Solutions for Carbon Management in Palm Oil Plantations

Led by our Sustainable Plantation Division Manager, Khairull Hafiz Ismail, we conducted a live Q&A session where he shared his insights on effectively mitigating carbon emissions in the palm oil sector and answered questions from the audience.

BBC Held an Open Discussion on Malaysia's Budget 2025: Tax Measures for ESG and Sustainability

In this live open discussion session, our ESG and sustainability consultant, Jia Xin Ng, shared her analysis and insights on the significant ESG initiatives and tax incentives introduced in Malaysia's Budget 2025, while also addressing questions from the audience.

Upcoming Events

IFRS S1 and S2 are essential standards for sustainability reporting, effective from January 1, 2025, requiring entities to disclose climate-related risks and opportunities and empowering stakeholders and investors to make informed decisions.

This IFRS Sustainability Disclosure Standards Public Workshop is designed to equip you with the knowledge and skills necessary for effectively navigating the evolving landscape of sustainability and climate change, with a particular focus on IFRS S1 and S2. This workshop is eligible for HRD Corp claims. Please contact us at [email protected] to request the required documents for the grant application.

Register now