Incentives to Strengthen Industrial Linkages

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To encourage large companies to participate in an Industrial Linkage Programme (ILP), expenditure incurred in the training of employees, product development and testing, and factory auditing to ensure the quality of vendors’ products, will be allowed as a deduction in the computation of income tax.

Vendors, including SMEs that propose to manufacture promoted products or participate in promoted activities in an ILP are eligible for the following incentives:

Investment Tax Allowance

  • Pioneer Status with a tax exemption of 100% of the statutory income for a period of five years; or
  • Investment Tax Allowance of 60% (100% on promoted areas) on the qualifying capital expenditure incurred within five years from the date the first qualifying capital expenditure is incurred. This allowance can be offset against 100% of the statutory income for each year of assessment.

To encourage vendors to manufacture promoted products or participate in activities for the international market, vendors in an approved ILP who are capable of achieving world-class standards in terms of price, quality and capacity, will be eligible for the following incentives:

  • Pioneer Status with a tax exemption of 100% of the statutory income for a period of 10 years; or
  • Investment Tax Allowance of 100% for promoted areas on the qualifying capital expenditure incurred within a period of five years which the company can offset against 100% of the statutory income for each year of assessment.

Applications should be submitted to MIDA.