Major Malaysian ICT association calls for tax restructuring for the upcoming state budget

The move aimes to make tech more widely available to the Malaysian public and businesses

The National ICT Association of Malaysia (PIKOM), a major industry association often dubbed as the “Voice of the ICT industry” in the country, has released a recommendation for budgetary plans for the year 2017, which set to be released in October.

The association calls for the Malaysian government to improve the affordability and availability of ICT goods and services as a means to “benefit the man-on-the-street,” given the current economic challenges and rising living costs.

There are several steps that PIKOM is proposing for the government to take:

• GST zero-rated for for ICT products and services;

• Greater incentives to own ICT goods and services by allowing income tax deductions of MYR3000 (US$710) once every two years for PCs and smartphones instead of the current three years, and implementing EPF Withdrawal Scheme for ICT Products, Services and Broadband;

• Across-the-board reduction of broadband rates for individuals, households and businesses.

Also Read: What initiatives has the Malaysian government introduced to boost startups?

In an official statement, the association explained that the GST zero-rate policy will have a direct impact on students, families, and professionals, particularly on the lower and middle income groups.

“The six per cent is a tremendous saving that will directly boost ICT demand but also encourage the continued development of a connected and knowledge based community,” it said.

PIKOM also calls for the government to allow double tax deduction on cost incurred (up to a capped amount) for individuals pursuing ICT-related certification programmes in the country. The move was meant as a solution to tackle Malaysia’s brain drain issue.

“Companies should also be allowed to claim double tax deduction if companies are bearing the cost of the training,” PIKOM stressed.

In an interview with ASEAN Today, Paul Copper, managing director of recruitment company PageGroup Malaysia, said the private sector has a great role in preventing the brain drain issue.

“In order to retain Malaysian talent in the country, companies should drive up strong retention strategies. Local businesses should continue to emulate multinational corporations and looking at non-financial benefits, such as a clear career path and building a stronger company culture, to encourage greater loyalty,” he said.

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