NEW PERFORMANCE-BASED INCENTIVE FRAMEWORK ENSURES REWARDS TIED TO ACHIEVEMENTS -- TENGKU ZAFRUL

KUALA LUMPUR, Oct 14 (Bernama) -- The New Performance-Based Incentive Framework will ensure actual achievements can be measured and encouraged, with incentives granted only when set performance targets are met, said the Minister of Investment, Trade and Industry, Tengku Datuk Seri Zafrul Abdul Aziz.

Tengku Zafrul said performance metrics to be assessed include the creation of high-skilled jobs and spending on research and development (R&D) that could raise the country’s economic complexity.

“This new framework ensures rewards are given only after actual performance is achieved, unlike the previous framework that granted incentives up front.

“The government wants to see economic spillovers, so the development of local small and medium enterprises (SMEs) is also important if they can meet the (performance metrics),” he said on Bernama TV’s Ruang Bicara: “Empowering the Economy & Tariff Negotiation Strategy” on Tuesday.

Tengku Zafrul said the Malaysian Investment Development Authority (MIDA), an agency under the Ministry of Investment, Trade and Industry (MITI), is ready to fully implement the New Performance-Based Incentive Framework for the manufacturing sector in the early first quarter (1Q) of 2026, followed by the services sector in early 2Q 2026.

He said the framework will balance efforts to attract high-growth activities that generate high-value jobs and help narrow economic disparities between regions, in line with the objectives of the New Industrial Master Plan (NIMP 2030).

“This will guarantee high-quality investment and will also raise wages,” he added.

In the Budget 2026 tabled by Prime Minister Datuk Seri Anwar Ibrahim, the government committed to offering tax incentives through the introduction of the New Performance-Based Incentive Framework in line with the NIMP’s focus on high-growth activities.

Anwar said this framework prioritises investment that creates high-value jobs while narrowing economic disparities between regions.

Meanwhile, Tengku Zafrul said there should also be emphasis on exports. 

As part of the Budget 2026 announcement, the Malaysia External Trade Development Corporation (MATRADE) will provide a market development grant and allocate RM60 million to facilitate SMEs exporting Malaysian-made products to existing and new markets, including Africa, Latin America, and Central Asia.

Tengku Zafrul said SMEs will have the opportunity to diversify their markets and focus on new ones rather than relying entirely on traditional markets.

The ministry elaborated that EXIM Bank will also offer easy financing to help companies affected by global trade tariff tensions, with funds totalling RM500 million.

“That fund is also to sustain SME exports, and MITI will ensure SME exporters take advantage of the 18 existing free trade agreements (FTAs), and we expect many more FTAs to be finalised, which will help these SMEs,” he added.

-- BERNAMA