Transport Ministry Seeks Budget 2027 Tax Incentives to Boost Local Shipbuilding and Ship Repairs

KUALA LUMPUR, Sept 29 – The Transport Ministry (MOT) has submitted proposals for tax incentives under Budget 2027 to encourage local shipowners to build and repair vessels within Malaysia, Transport Minister Anthony Loke Siew Fook announced.

Speaking to reporters after officiating Malaysia Maritime Week 2026 (MMW2026) on Tuesday, Loke stated that the proposal aims to address financing hurdles that continue to stifle growth across the domestic shipping industry.

“One of the major challenges faced by a lot of shipowners is how to finance their ships. It’s not easy because most Malaysian banks do not look at this sector as they think it is a very high-risk sector,” Loke explained.

He highlighted that while government financing mechanisms exist, local players have historically struggled to secure capital from commercial financial institutions. MOT is advocating for targeted government interventions, including coordination with Bank Negara Malaysia, to ease credit access and improve financing channels for maritime businesses.

Loke noted that the final decision regarding these tax incentives rests with the Ministry of Finance (MOF) and will be unveiled when Budget 2027 is tabled in Parliament on October 9.

Earlier in his opening speech, Loke highlighted the establishment of the Malaysia Shipping Development Fund (MSDF) as a key financial driver for sector growth.

“By establishing this fund under the recently enacted A1551 legislation, we are deploying a strategic financial mechanism to aggressively build up our domestic shipping capacity,” he said, emphasizing that the MSDF serves as a mechanism for national resilience aimed at expanding the Malaysian-flagged merchant fleet.

–NMT