Home » News » Sustainability allocation in Budget 2022 to provide support for economic growth, says ICAEW

Sustainability allocation in Budget 2022 to provide support for economic growth, says ICAEW

The growing allocation towards sustainability in Budget 2022 reaffirms Malaysia’s commitment toward a sustainable future with the only remaining goals being building a sustainable economy, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

In a statement issued by the organisation, its members commented that the country is headed in the right direction through the proposed measures to strengthen the sustainability agenda such as giving import duty, excise duty and sales tax exemptions on electric vehicles (EVs).

Sime Darby Bhd Group chief financial officer Mustamir Mohamad, one of the ICAEW members, said with the global environmental, social and governance (ESG) push, Budget 2022 reinforces the need for Malaysian companies and the local supply chain to adopt ESG frameworks premised on higher value creation.

“This would also resonate with international investors who increasingly demand more robust ESG strategies, potentially attracting higher-value investments,” he said.

Mustamir also said the tax incentives announced in Budget 2022 to spur EV adoption are important next steps, following the introduction of Malaysia’s Low Carbon Mobility Blueprint in the 12th Malaysia Plan.

Another ICAEW member, PwC Malaysia chief strategic operations officer and net zero lead partner Pauline Ho, said the provision of the RM1 billion Low Carbon Transition Facility to help small and medium enterprises (SMEs) reduce carbon footprint supports a just transition pathway for Malaysia, as it helps SMEs in its supply chain to respond to the ESG agenda.

The fund, provided by Bank Negara Malaysia, is to help SMEs adopt sustainable and low carbon practices such as by increasing the use of sustainable raw materials and renewable energy. It will be based on matching fund arrangement with participating financial institutions.

“Investors and stakeholders are scrutinising various supply chain sustainability aspects of businesses, from carbon emissions to diversity and inclusion, be it gender, race, age or ability.

“While larger businesses lead in ESG practices, relatively smaller businesses are beginning to pivot as they endeavour to meet growing customer demands in those aspects,” she said.

In a separate statement, Airbnb welcomed the new initiatives and incentives allocated under Budget 2022 to Malaysia’s tourism industry.

Airbnb Southeast Asia head of public policy Mich Goh said overall, the total of RM1.6 billion allocated to tourism rejuvenation efforts, in particular the RM60 million incentive fund to promote domestic tourism as well as the extension of the tax relief incentive of up to RM1,000 for domestic travel spending till end of next year, are welcome measures which will encourage travel and help industry players drive the sector’s recovery.

“The pandemic has posed significant challenges for the travel industry, but we have seen a resurgence in travel appetite with the return of interstate and international travel. The government’s renewed focus to re-energise travel in this new normal marks a clear path forward.

“Looking ahead, Airbnb hopes to see the expansion of ongoing initiatives and implementation of new incentives for the short-term residential accommodation industry, which continues to play an essential role in contributing to Malaysia’s tourism economy,” she added.

  • The Edge Markets