Speaker
Description
This study explores the importance of Section 2 of Malaysia's Income Tax Act 1967, which must be complied to in conjunction with Section 34B of the same act. Section 34B introduces the principle of Double Tax Deduction (DTD) for eligible science and technology (S&T) research and development (R&D) activities. The study employed qualitative methodologies to examine the procedures involved in designing qualifying expenses for DTD, and its impact on the local innovation ecosystem. Insights were obtained from at least ten selected local industry representatives and researchers who have received benefits from the DTD incentive by participating in contracted research and development projects during the previous five years. The results suggested that the DTD incentive provides benefits for "Approved Research Institutions (ARI)" by promoting increased collaborations, improving competitiveness, and fostering partnerships with local industries. Furthermore, it highlights the significance of being transparent and accountable by adhering to compliance and reporting obligations. Consequently, this enhances and maintains the innovation ecosystem. During the study, it was discovered that DTD is appealing but requires a comprehensive understanding in order to effectively incorporate eligible activities and expenses while adhering to the limitations of DTD. The research ultimately shows that the DTD fosters local innovation and stimulates national socioeconomic development, which in turn benefits local businesses and the innovation ecosystem. This leads to effective and sustainable socioeconomic progress in the country.
Keywords: Double Tax Deduction, Section 34B, Income Tax Act 1967, Research and Developement, Science and Technology, Insustrial Solution
