Tax and the regulatory environment
The current regulatory environment
Green Building Index (GBI) and GreenRE
Local green rating tools have been developed for buildings in Malaysia, with tax incentives applicable to certified buildings
Carbon and tax considerations
Tax implications are associated with the acquisition, holding, disposal and utilisation of carbon
Environmental incentives
A range of tax incentives has been introduced to promote a low-carbon economy for businesses investing in green technology such as renewables, energy-efficient equipment, water-saving, and waste/ recycling solutions.
An evolving regulatory landscape
Regulations are still being developed in several emerging areas such as plastic waste and Extended Producer Responsibility (EPR)
Here’s how we can help
Assessment of tax and regulatory exposure
We help you assess the impact from your global exposure to environmental taxes and regulations, manage associated risks, and optimise your tax position from a sustainability perspective. We help you connect with policymakers through proactive engagement.
Preparation to manage the direct and indirect impact of the carbon tax
Our approach involves conducting scenario analysis based on predicted pricing, greenhouse gas (GHG) emission projection of potential future exposure, and gap analysis on current data availability for GHG calculation.
Emissions and carbon tax management
We oversee internal carbon pricing (ICP) design and implementation, and capacity building/upskilling initiatives to change internal behaviours.
Decarbonisation studies and plans
We perform studies to help you reduce your carbon tax exposure. This is achieved by supporting offset procurement strategies and aligning your supply chain and procurement to meet key emissions reduction targets.
Accounting and compliance for carbon tax
This includes GHG calculations, carbon tax provisioning, and helping you understand your sustainability compliance obligations and regulatory compliance requirements.
Assessment of incentives and grants applicability
We help you identify viable green financing opportunities such as subsidies, grants, and incentives. We also assess the socio-economic benefits of GHG reduction projections and develop impact case studies for anticipated bespoke incentives where an existing incentive is not present.
Establish team roles and responsibilities
The focus will be on your tax department’s role in supporting your sustainability strategy, ensuring that your sustainability investments are evaluated on an after-tax basis, with available incentives factored into your financial returns.
Bridge gaps in understanding wider tax interactions and implications
This includes sustainability reporting and assurance, ESG risk integration, and impact management.
Explore related case studies
- Malaysian manufacturer
- Malaysian conglomerate
- Local financial industry association and local regulator
- Government body
Malaysian manufacturer
Challenge:
The client was constructing a new manufacturing facility with various new technologies but was not aware of the green incentives available.
Solution:
We performed a review of all eligible incentives and grants available, assessing the quantum and criteria.
We then identified which incentive was applicable and most beneficial to the client, based on our analysis of their energy efficient assets within the building (chillers, pumps, and generators).
We assisted the client to apply for the Green Investment Tax Allowance (GITA).
Results:
By working closely with the client’s project and tax team, and liaising with our contacts at the Malaysian Investment Development Authority (MIDA) and the Malaysian Green Technology and Climate Change Corporation (MGTC), we were able to get the incentive approved on behalf of the client.
Malaysian conglomerate
Challenge:
The client wanted to incorporate internal carbon pricing (ICP) into business decisions to support their net zero commitments and change behaviours internally. They needed to understand the feasibility and the risks and opportunities involved.
Solution:
We assisted the client in developing their ICP mechanism. We conducted research and benchmarking of global carbon pricing mechanisms, such as carbon taxes, emissions trading schemes, and ICP models. This enabled us to develop an ICP methodology aligned with the client’s current GHG emissions data and decarbonisation strategies.
Results:
As part of the project, we proposed a realistic carbon price, considering industry benchmarks and regulatory requirements, including IFRS S1 and S2 disclosures. We also delivered an ICP tracking tool and upskilled the client's internal teams on the benefits of ICP and available grants and incentives.
Local financial industry association and local regulator
Challenge:
The client sought our expertise to develop a green technology financing report for a closed-door conference that was jointly organised with the local financial regulator.
Solution:
We prepared a report documenting an overview of the green technology sectors in Malaysia and four other countries. We conducted extensive research on the size of the green technology market, trend analysis, key players, growth simulation programmes, and a high-level analysis of financial institutions supporting the green industry.
Results:
The final report integrated our research findings from the comparative analysis of other countries, our notes and observations from the conference, as well as feedback from the client and their appointed green technology specialist.
Government body
Challenge:
The client sought to understand the landscape of current incentives for the adoption of green technology in the local manufacturing sector, as well as actions needed to attract further green technology investments in the sector.
Solution:
We conducted interviews and focus group discussions with key stakeholders from various private and public organisations. We ran an online survey to gather additional insights, targeting up to 1,000 companies within the manufacturing sector. The consolidated findings were used to develop the recommendations in the final report.
Results:
The final report outlined immediate and long-term recommendations, including enablers, policies, incentives, and frameworks that the client can use to promote green technology investments in Malaysia’s manufacturing sector.
