Since the announcement by Prime Minister Datuk Seri Anwar Ibrahim on the electricity tariff hikes for companies, the business sector has issued various statements on the possible impact the hikes could cause on their business and its trickle-down effect.
With the mid-tier companies strongly calling for the government to delay or reduce the rate of the hike, Pikom the association that represents the ICT sector has expressed its views that the tariff rate hike should be considered carefully and should exclude the SMEs, software developers, telecommunication companies and data centres as the impact of tariff increase may eventually be passed down to consumers.
According to PIKOM Chairman, Mr Ong Chin Seong, “After the announcement was made, we consulted our members. Collectively, we feel that imposing the electricity hike will start to discourage potential MNCs from operating in Malaysia and could also encourage existing MNCs to look elsewhere. At the same time, many companies are still struggling to rebuild their
businesses post-pandemic. Furthermore, the electricity price hike will contribute to inflation.” PIKOM is the largest digital and tech association in Malaysia representing more than 1000 members that include large tech enterprises, tech SMEs, cloud hyperscalers, software developers, telecommunications companies, data centres, cybersecurity companies and shared services companies.
The association reminds the government of the importance of SMEs, Telcos and Data Centres which are essential as they support the growth of the domestic market while driving the digitalization initiatives of the country. “If the electricity hike is firmed, the government may want to consider panning out a subsidy plan or raise the hike with more strategic phases such as putting in place a timeframe threshold including tax rebates for companies paying higher tariff it added.
The bigger concern to consider could be for investors such as cloud hyperscalers who are employing a lot of highly skilled local workforce. The price hike will encourage them to move and look elsewhere.