Govt proposes tax breaks for donors supporting anti-graft programmes

BUDGET 2026 | The government has proposed that NGOs’ anti-corruption programmes recognised by the MACC be approved for tax deductions as projects of national interest.

"Donors who make cash contributions to approved anti-corruption programmes will also be eligible for income tax deductions," Prime Minister Anwar Ibrahim announced when tabling Budget 2026 in the Dewan Rakyat today.

At present, the government offers special tax deductions to encourage initiatives that promote integrity, good governance, and anti-corruption practices within the corporate sector.

First, companies that incur expenses on integrity and anti-corruption education programmes are eligible for a special tax deduction under Section 34(6)(h) of the Income Tax Act 1967.

In an article on the MACC's website last year, MACC's director (monitoring and coordination) Tarmize Abdul Manaf explained that a few conditions must be met to qualify for this.

Tarmize said the educational programme must be organised in collaboration with the MACC, either at the headquarters or one of its state offices; it must benefit the general public; and it must not be profit-oriented for the company.

Other special tax deductions

Secondly, special tax deductions are also available for expenses incurred in developing and implementing an organisational anti-corruption plan, also provided for under Section 34(6)(h) of the Income Tax Act 1967.

"To receive a tax deduction, the organisational anti-corruption plan must be comprehensive, covering all areas of work and business within the company.

“The plan is also for the company's use only, not for other organisations. Furthermore, it must be documented either physically or digitally and endorsed for its use," Tarmize wrote.

Eligible expenses include fees for corruption risk management and anti-corruption plan development workshops, honorariums for trainers and consultancy fees, transportation, accommodation, and meals for participants, as well as initial printing costs for the organisational anti-corruption plan document.

The deductible amount is equivalent to the actual expenses incurred, up to a maximum of RM100,000.

Obtain accreditation, certification

Thirdly, the government encourages companies and organisations to obtain internationally recognised accreditation and certification.

"One such certification is MS ISO 37001: Anti-Bribery Management System (MS ISO37001: ABMS). This international standard helps organisations to create a robust governance system, making it possible to detect, prevent, and respond to corruption risks.

"Furthermore, sub-strategy 2(5) of the National Anti-Corruption Strategy (NACS) 2024-2028 suggests that MS ISO 37001: ABMS certification should be a requirement for companies to bid for government contracts valued at RM10 million and above," Tarmize explained.

He added that as an incentive, expenses incurred in obtaining accreditation and certification from the Standards Department (DSM) and other recognised certification bodies are eligible for tax deductions under Sections 34(6)(m) and 34(6)(ma) of the Income Tax Act 1967.

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