Banda hilir: The Ministry of Investment, Trade and Industry (MITI) is currently looking at issues related to the reinvestment allowance (RA) and will bring them to the attention of the Finance Ministry (MoF) following the business community's call for improvements to the incentive to encourage greater corporate reinvestment.
According to BERNAMA News Agency, Deputy Investment, Trade and Industry Minister Sim Tze Tzin stated that the RA incentive falls under the MoF's jurisdiction, and any decision regarding an extension of the incentive period or policy changes is subject to the consideration of the ministry and the tax authorities. "MITI will help in conveying the voice of the business community to the MoF. However, the final decision rests with the MoF and the Inland Revenue Board," he mentioned after holding a dialogue session with Melakan entrepreneurs in Banda Hilir, Melaka.
Sim emphasized that the RA is not meant to be a permanent incentive, noting that the current eligibility period is already extensive. Any proposal to extend it further, such as from 15 years to 20 years, requires thorough examination by the MoF.
On another note, Sim highlighted that the services sector contributed 51.4 percent to Melaka's economy, primarily driven by the tourism industry, which has also bolstered the performance of the country's services sector. He explained that Malaysia recorded a surplus in services trade for the first time in 2025, after experiencing deficits since 2011, reflecting the sector's positive progress.
He added that MITI, along with the Malaysian Investment Development Authority (MIDA), Export-Import Bank of Malaysia Bhd (EXIM Bank), and Malaysian Industrial Development Finance Bhd, will continue to assist companies in Melaka in improving productivity, adopting automation, and meeting environmental, social and governance (ESG) certification requirements to penetrate international markets.
Moreover, Sim highlighted that Melaka recorded RM12.1 billion in approved investments in the manufacturing and services sectors in 2025, a notable increase from RM2.3 billion in 2020, marking it as the state's strongest investment record to date. He noted that this performance signifies Melaka's economy is on a positive trajectory, supported by a declining unemployment rate and robust investment growth. "All of this is the result of political and economic stability, demonstrating how crucial these elements are for our future. We hope this momentum can be sustained so that the socio-economic growth of both the state and federal governments continues to progress," he concluded.