KUALA LUMPUR (Oct 18): The government has unveiled a new investment incentive framework, supported by a strategic fund of RM1 billion, designed to cultivate local talent and promote high-value activities in the electrical and electronics (E&E) and artificial intelligence (AI) sectors. 

Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced in his Budget 2025 presentation on Friday that the framework is expected to be rolled out in the third quarter of 2025.

The initiative aims to diversify the E&E sector by encouraging high-value-added activities, such as integrated circuit (IC) design services and advanced materials. Furthermore, it will expand tax incentives for exports to include IC design activities, said Anwar.

To provide high-income job opportunities for the people in the field of AI and cutting-edge technology, the government will offer special tax deductions to private universities and skill training institutes that introduce new courses in digital technology, AI, robotics, the Internet of Things (IoT), data science, financial technology (fintech), and sustainable technology.

According to Anwar, the government has introduced several initiatives to strengthen the local supply chain, which includes multinational enterprises (MNEs) that spend up to RM2 million annually benefiting from a double tax deduction for three consecutive years.

In addition, he said that MNEs or their suppliers making joint-venture investments with local suppliers will receive tax deductions based on their total investments.

“A matching investment fund exceeding RM100 million will be made available through an equity crowdfunding platform to help expand local suppliers in the E&E sector, and for specialty chemicals and medical devices,” he added.

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