KUALA LUMPUR: Granting tax exemptions to companies undertaking new food production projects is a strategic approach to position the industry as a high-impact investment sector while strengthening food security.
General Manager of the National Farmers Organisation (NAFAS) Muhammad Faris Arriffin said the move demonstrates the government’s commitment to transforming the food sector beyond a mere social or welfare endeavour.
He stated that with a full tax exemption, the return on investment for food projects will increase significantly.
This will establish Malaysia as a premier destination for agri-food investment, attracting both domestic and foreign capital.
Many entities that were previously cautious about entering the food sector can now consider large-scale investments in various agricultural areas.
Muhammad Faris added that the five-year incentive for expansion projects would enable existing players to upgrade their operations through automation and research.
He said the measure aligns with the government’s policy to boost domestic production and reduce import dependency.
Meanwhile, Universiti Putra Malaysia senior lecturer Dr Shamsul Azahari Zainal Badari said the government’s initiative will also stimulate the economy.
He noted that the tax incentive is expected to attract more investment into the food sector by lowering company costs.
The extended eligibility period for the incentive until December 31, 2030, gives investors ample time to plan and develop their projects.
This demonstrates the government’s serious commitment to developing the food sector sustainably.
During the tabling of Budget 2026, Prime Minister Datuk Seri Anwar Ibrahim announced a proposed 10-year full income tax exemption for companies undertaking new food production projects.
Existing companies carrying out expansion projects will also enjoy a 100 percent income tax exemption for five years, with the application period extended until December 31, 2030. – Bernama