Budget 2018 Wishlist: All Eyes on the ICT Sector

Chin Chee Seong, Chairman of PIKOM

In view of the upcoming Budget 2018, the National ICT Association of Malaysia (PIKOM) proposes several recommendations to the Malaysian government for inclusion in the budgetary plans for the coming year. These recommendations are focused on providing a needed boost for the digital economy, which comprise of a wide range of sub-sectors including ICT hardware, software, services, commucations and eCommerce.

  1. Propagating a digital ready workforce

In developing the next generation of talent to support Malaysia’s digital economy, a greater number of Science, Technology, Engineering and Mathematics (“STEM”) oriented students are needed. Government should explicitly promote secondary school and tertiary students to embark on STEM stream or courses that are relevant to Industry 4.0.

PIKOM recommends:

  • STEM students to be provided with a stipend or monetary incentives to pursue additional online courses, purchase technology and procure additional resources.
  • Enhanced corporate tax incentives for companies providing scholarships for Computer Science, Software Engineering and STEM related courses, as well as companies training employees to obtain professional certification in critical core areas such as data science, artificial intelligence, cyber-security and others.
  1. Withholding tax on software

The Finance Act 2017 has had a detrimental impact on the local software industry. Compounding the issue is uncertainly on the application of withholding tax on software prior to 2017.

PIKOM recommends:

  • Software should not be subjected to royalty for mere use or right to use
  • Tax should not be imposed retrospectively.
  1. Greater utilisation of ICT in government

The government needs to be at the forefront of technology adoption, which will position Malaysia as a leader in the digital age.

PIKOM recommends:

  • The government should accelerate the use of disruptive ICT technologies such as hyperscale public cloud, advanced analytics, mobile, social, artificial intelligence, IoT, Blockchain and others. This will not only improve public service delivery and reduce operational cost, but also serve as a catalyst and confidence booster for the private sector to adopt these technologies.
  1. Making ICT more affordable for every Malaysian

Affordable, accessible ICT hardware and software is vital towards creating an educated, informed nation, whose population is not left behind in the new digital era.

PIKOM recommends:

  • GST zero-rated for ICT products and services, especially for bigger ticket items like laptops, smartphones and so on.
  • Tax relief of RM3,000 to be exercisable annually and to cover PCs, tablets and smartphones.
  • Reintroduce the EPF PC Scheme
  • Reduce broadband prices to be on par with other countries without the speeds intact

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