Lower stamp duty, longer tax breaks to boost ship registrations, investments

Transport Minister Anthony Loke revealed that the Malaysian government is introducing a 10-year income tax exemption and reduced stamp duty on ship financing to encourage more vessel registrations and investments in the country's shipping industry. Previously, shipping companies faced uncertainty in planning long-term investments due to the need to reapply for income tax exemptions every two years.

The extended exemption, from 2027 to 2036, aims to provide companies with greater certainty to invest in new vessels and register them under the Malaysian flag.

The government also announced the introduction of fixed stamp duty rates for loans used to purchase or construct Malaysian vessels. The new rates are RM2,000 for loans up to RM100 million and RM5,000 for loans exceeding this amount. This reduction in stamp duty, which previously stood at 0.5% of a vessel's value, will significantly lower the cost of financing and building new ships.

For a vessel valued at RM100 million, this means a saving of RM498,000 for shipping companies, making the prospect of investing in new vessels and registering them under Malaysian jurisdiction much more attractive.

Transport Minister Loke hopes that these measures will not only benefit shipping companies but also stimulate growth in the broader maritime industry, including shipbuilding businesses in Sarawak, especially in Sibu. The government's efforts are expected to spur more investment in vessels, leading to the construction of new ships and ultimately, accelerating the growth of the shipping industry in Malaysia.