KUALA LUMPUR, Aug 19 — The government is looking to implement a carbon tax to incentivise local companies to reduce carbon emissions, said Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz today.
He said the Investment, Trade and Industry Ministry is in discussion with the Finance Ministry (MOF) as well as the Natural Resources and Environmental Sustainability Ministry to determine how the tax would be implemented.
“In fact, this was discussed with the National Committee on Investment and the MOF was given a timeline to look at this. I think the MOF needs more time as it has to study (this) holistically,” he told a media conference on green investment strategy here today.
However, the implementation of carbon tax would not be soon as preparations would take at least a year, he added.
Tengku Zafrul was responding to a question on how transparent his ministry would be in using the carrot-and-stick approach to promote green investment.
“For example, one subsector under the manufacturing sector contributes close to 25 per cent of carbon emissions. That is just one section of the manufacturing sector, so what do we do? Of course, we have the ‘stick’ approach; we need to make sure companies are ready to comply,” he added.
Tengku Zafrul said the “carrot” approach would be more straightforward in terms of fiscal and non-fiscal incentives to encourage more participation from the local companies.
“But we need both at the same time. We can’t have just the stick without the carrot, nor vice versa,” he noted, adding that local companies would not be on a level playing field if the carbon tax were not implemented.
— Bernama
