KUALA LUMPUR: The Carbon Tax Bill is in its final stage of drafting, although the government has yet to fix the tax mechanism or its projected revenue, the Dewan Rakyat was told.
Deputy Finance Minister Liew Chin Tong said the tax was meant to put a price on carbon rather than to raise money, and would start with the iron, steel, and energy sectors as the main sources of greenhouse gas emissions.
"The purpose of the carbon tax is not to generate more revenue," he said during Question Time in Parliament on Wednesday (June 24).
He added that it was about carbon pricing, or setting a price that those sectors must pay for their emissions.
Liew said the rate would be introduced in phases to avoid burdening industries, particularly small and medium enterprises, given market uncertainty stemming from the conflict in West Asia.
He said the eventual revenue would depend on the tax rate, and on the threshold and scope of emissions still to be announced by the government.
The bill is being drafted alongside the National Carbon Market Policy and the National Climate Change Bill, known as RUUPIN, which the Natural Resources and Environmental Sustainability Ministry is due to table in July.
Liew said RUUPIN would form the legal foundation for the carbon tax and introduce a monitoring, reporting and verification system to support carbon pricing and the country's shift to a low-carbon economy.
The carbon tax was announced in Budget 2025 in October 2024, and is intended to align with the European Union's Carbon Border Adjustment Mechanism.
