KUALA LUMPUR, Sept 10 (Bernama) -- The government on Friday proposed anincentive package which includes tax deduction and pioneer status toencourage the commercialisation of resource-based research and development(R&D) findings by public research institutes.

Currently, research institutes such as the Malaysian Palm Oil Board(MPOB), Malaysian Agricultural Research and Development Institute (MARDI)and public institutions of higher learning have produced a lot of reseachon resource-based industries but the initiative to commercialise thefindings remain limited.

To encourage commercialisation of these findings, the government announcedin the Budget 2005 that a company that invests in its subsidiary companyengaged in the commercialisation of R&D would be given tax deductionequivalent to the amount of investment made in the subsidiary company.

At the same time, the subsidiary company that undertakes thecommercialisation of the R&D findings will be given pioneer status with100 percent tax exemption on statutory income for 10 years.

However, a company eligible for the incentives must be at least 70 percentowned by Malaysians while the company that invests should own at least 70percent of the equity of the company that commercialises the R&D findings.

At the same time, only resource-based R&D findings are eligible and thatthe commercialisation of the R&D findings should be implemented within ayear from the date of approval of the incentive.

Meanwhile, applications for the incentives should be made through acommittee at the Malaysian Industrial Development Authority (MIDA). Thecommittee includes a representative from the Ministry of Science,Technology and Innovations.

The proposal is effective for applications received from Sept 11, 2004.