The Automation Capital Allowance (Automation CA) incentive was introduced in the National Budget 2015. This incentive was categorised under the ‘Strengthening Economic Growth’ strategy and is expected to be the key factor to encourage automation in the manufacturing sector.
The main objectives of the Automation CA incentive are:
- To encourage manufacturing companies to engage in innovative and productive activities;
- To encourage quick adoption of automation specifically for labour-intensive industries;
- To spur automation initiatives; and
- To enhance productivity in manufacturing sector.
Applications for the Automation CA are jointly evaluated by MIDA (non-technical) and SIRIM (technical).
- The Automation Capital Allowance of 200% on the first RM10 million expenditure incurred within the year of assessment from 2023 to 2027. The scope of automation includes adaptation of Industry 4.0 elements.
- Adaptation of Industry 4.0 elements refers to machinery / equipment that adapt at least one of the Industry 4.0 pillars namely big data analytics, cloud computing, augmented reality, cybersecurity, artificial intelligence, additive manufacturing, system integration, simulation, internet of things (IoT), autonomous robots and
advanced materials. - Encourage manufacturing companies to engage in innovative and productive activities.
- Encourage quick adoption of automation specifically for labour-intensive industries.
- Spur automation initiatives.
- Enhance productivity in the manufacturing sector.
Malaysia has revised the “Guidelines And Procedures For The Application Of Automation Capital Allowance (Automation Ca) For Manufacturing And Services Sectors” on 19 June 2024, please visit Automation Capital Allowance for more information.