08 January 2026 at 11:17 pm IST
A group of tax and sustainability experts in Malaysia urged policymakers to introduce a national carbon tax at a level that can effectively reduce greenhouse gas emissions while avoiding undue burdens on businesses. The call came during the 18th Annual Malaysia Corporate Day event in Kuala Lumpur, where speakers highlighted the need to benchmark the upcoming carbon pricing mechanism against successful regional examples. Senior advisory figures pointed out that Singapore’s phased approach to carbon taxation — starting at a modest rate when first launched — provides a useful template for Malaysia. They suggested that an initial carbon tax rate similar to Singapore’s early rate of around S$5 per tonne of carbon dioxide equivalent could help ease businesses into the new regime without triggering relocation or competitiveness concerns. Singapore has since progressively increased its own carbon tax, illustrating the potential for gradual escalation tied to economic readiness. Experts cautioned that setting the carbon tax too high at the outset could discourage investment and prompt companies to move operations abroad, while a rate set too low would fail to deliver meaningful emissions reductions. They emphasised that a balanced tax should still encourage firms to adopt cleaner technologies, improve energy efficiency and integrate sustainability considerations into long‑term planning. The Malaysian government has previously signalled its intention to introduce a carbon tax as part of broader climate policy, with details expected to be formalised in the Climate Change Bill to be tabled in Parliament later in 2026. This legislation is anticipated to include provisions for emissions monitoring, reporting and verification, and could initially cover high‑emitting sectors such as iron, steel and energy. A well‑designed carbon tax, according to experts, would provide Malaysia with a credible tool to advance its low‑carbon transition while maintaining economic stability.
