The government will determine the rate for Malaysia’s upcoming Carbon Tax only after the amendment to the Climate Change Bill is passed in Parliament, Finance Minister II Datuk Seri Amir Hamzah Azizan said.
Speaking to reporters on Wednesday, Amir Hamzah said the Finance Ministry (MOF) is currently awaiting the legislative framework to be finalised before deciding on the tax rate and implementation mechanism.
“The Carbon Tax will only be set once the Climate Change Bill has been passed. This will ensure that the tax framework is aligned with Malaysia’s broader climate policy and legal provisions,” he said.
Malaysia is preparing to introduce its first Carbon Tax as part of ongoing efforts to transition towards a low-carbon economy. The tax is expected to target high-emission industries, including energy, manufacturing and heavy industrial sectors, which collectively account for a large share of the country’s greenhouse gas emissions.
The initiative forms part of Malaysia’s commitment to achieving net-zero emissions by 2050, as outlined in the National Energy Transition Roadmap (NETR) and the 12th Malaysia Plan.
The government has previously stated that revenues collected from the Carbon Tax may be channelled towards green technology adoption, renewable energy initiatives, and industrial decarbonisation programmes.
Industry players are awaiting further clarity on the tax structure, with some calling for phased implementation and transitional incentives to minimise economic disruption.
The proposed Climate Change Bill, once passed, will serve as Malaysia’s overarching legal framework for carbon management, climate adaptation, and environmental sustainability.
