This Order exempts a qualified person from payment of income tax on its statutory income from an approved food production project applied to the Minister between 1 October 2005 and 31 December 2015, on condition that the project has not commenced at the date of application and it commences within a year from the date of approval. The statutory income shall be determined after deducting capital allowances notwithstanding that no claim for such allowances has been made.
For a new project, the exemption commences from the first year of assessment in which statutory income from the project is derived, and continues for a period of ten consecutive years of assessment.
For an expansion project, the exemption commences from the first year of assessment in which statutory income from the existing and expansion projects is derived, and continues for a period of five consecutive years of assessment provided that the first year of assessment shall not be earlier than the year of assessment in the basis period in which the date of Minister’s approval falls.
Any amount of adjusted loss incurred -
(i) from the year of assessment in the basis period in which the project commenced to the year of assessment immediately prior to the exempt years of assessment; and
(ii) during the exempt years of assessment
shall be allowed carried forward and deducted against the statutory income from the project in its post-exempt years of assessment until the adjusted loss is fully utilised.
Qualified person means:
(i) a company incorporated under the Companies Act 1965
(ii) an agro-based co-operative society
(iii) an Area Farmers’ Association
(iv) a Federal Farmers’ Association
(v) a State Farmers’ Association
(vi) an Area Fishermen’s Association
(vii)a Federal Fishermen’s Association
(viii) a State Fishermen’s Association, and
(ix) sole proprietorship, partnership, or association solely engaged in agriculture or fishery
Approved food production project means a project in relation to
(a) planting of kenaf, vegetables, fruits, herbs or spices
(b) aquaculture
(c) rearing of cows, buffaloes, goats or sheep; or
(d) deep sea fishing
which is deemed to be a separate and distinct business.
New project means the first project carried out by a qualified person for the purpose of undertaking an approved food production project and the new project is approved by the Minister.
Expansion project means a project carried out by a qualified person for the purpose of expanding its existing approved food production project where the expansion project has not been granted an exemption under this Order and it involves a new area of land and is approved by the Minister.
The Order shall not apply to a person who has been granted/made a claim for
a) any incentive under the Promotion of Investments Act 1986
b) re-investment allowance (Schedule 7A) and investment allowance (Schedule 7B) of ITA
c) an exemption under Section 127(3)(b) or (3A) of ITA; or
d) deduction under any rules made under Section 154 except an allowance under Schedule 3 of ITA.
The Minister may withdraw the exemption if the qualified person fails to comply with the conditions imposed by the Minister.
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