THE IMPACT OF GREEN TAX INCENTIVES ON ESG PERFORMANCE OF SMES
DOI:
https://doi.org/10.35631/AIJBES.828009Keywords:
ESG, Sustainability, SDGs, Tax, SMEs, Green AccountingAbstract
This article discusses the impact of green tax incentives on driving Environmental, Social, and Governance (ESG) transformation among the small and medium enterprises (SMEs) in Malaysia. ESG activities should be well adopted by large corporation, but it is yet to be fully understand and adopted by smaller businesses. ESG for SMEs is crucial because SMEs with robust ESG policies and activities will have a competitive edge and visibility among the investors, consumers and public at large. Thus, this paper explores how targeted tax policies can help SMEs in promoting sustainable business practices, reducing environmental impact, and fostering innovation. By incentivizing renewable energy, waste reduction, and resource efficiency, green tax incentives support small and medium-sized enterprises in meeting ESG goals and contributing to global sustainability targets as stated in Sustainable Development Goals (SDGs). The study highlights the role of government in designing effective tax frameworks, the benefits for businesses adopting these incentives, challenges and recommendations on the long-term economic and environmental advantages of a robust ESG transformation driven by green taxation.
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