Budget 2027: Government to reduce tax incentive for EV charging station operators

During the recent tabling of Budget 2027, Prime Minister Anwar Ibrahim announced that companies involved in green and sustainable technology projects—including EV charging stations—will get to enjoy an Investment Tax Allowance of up to 100% until 31 December 2030.

This might sound like great news for Charge Point Operators (CPOs) out there, but unfortunately, the reality is quite different once you take a closer look at the fine print.

Tax incentives for EV charging station operators will be reduced in 2027

The Investment Tax Allowance mentioned by PM Anwar in Parliament is likely the Green Investment Tax Allowance (GITA) scheme, which was originally introduced in 2013.

The scheme was revised in 2023 under Budget 2024 to include EV charging station operators. Valid through 31 December 2026, this current revision allows CPOs to claim a 100% investment tax allowance over five years, with a 100% set-off cap against their statutory income.

Under the newly proposed amendments for Budget 2027, the GITA scheme will indeed be extended until the end of 2030, and CPOs can still benefit from it for five years. That sounds great on the surface.

However, there is a catch: the allowance rate will be cut down to 60%, while the statutory income set-off cap will also be reduced to 70%.

These changes were laid out in Appendix 25 of the Tax Measures for Budget 2027 that was published on the official Budget 2027 portal.

How will this impact EV charging station operators?

To put things into perspective, let’s say a CPO makes a profit (statutory income) of RM1 million. Under the current arrangement, a CPO with sufficient GITA allowances can offset their tax bill entirely—paying RM0 in corporate tax.

Under the proposed amendments running from 2027 to 2030, GITA will only cover up to RM700,000 of that profit (70%). Consequently, the remaining RM300,000 will be subject to corporate tax, introducing direct tax costs that CPOs didn’t have to pay previously.

What happened to the promised incentives?

In July, Deputy Minister of Investment, Trade, and Industry Liew Chin Tong said in Parliament that the government is actively discussing additional support and incentives for CPOs to accelerate infrastructure deployment.

Yet, with these proposed GITA reductions under Budget 2027, the government appears to be moving in the opposite direction by shrinking existing tax shields instead.

GITA is currently one of the very few financial incentives available to local CPOs in Malaysia. By reducing this tax shield, the new policy could end up having a direct negative impact on the rollout speed and growth of Malaysia’s EV charging network.

On a related note, the Malaysian Highway Authority (LLM) is planning to deploy 50 charging points next year as part of Budget 2027 provisions. While that might not sound like much, it would be a massive improvement compared to the current deployment rate of EV charging infrastructure on Malaysian highways.