The National ICT Association of Malaysia (Pikom) is cautiously optimistic that the measures announced in today’s Budget 2019 speech will spur the digital economy.
On the allocation of more than RM5 billion for the adoption of Industry 4.0 for years 2019-2021, Pikom chairman Ganesh Kumar Bangah has reveals that Pikom looks forward to this allocation.
He shares this move would benefit many of Pikom’s members who are already providing solutions in Big Data/IoT, Artificial Intelligence,Cloud Computing and Automation.
“On the other hand, the matching grant of RM2 Billion between GLIF (Government-linked Investment Fund) and private sector for high growth tech companies will have a catalytic effect on Malaysia’s tech funding ecosystem and encourage the expansion of tech companies and to scale their operations globally.”
“Pikom also applauds the government’s allocation of RM 1 billion for the National Fibre Connectivity plan and its proposed plan to offer 30Mbps broadband connectivity outside urban centres within five years as part of its commitment towards the digitalisation of Malaysia's economy.
“This will also have a catalytic effect in the ICT Industry especially spurring the growth of the e-commerce sector in Malaysia,” he says.
Ganesh believes the allocation of RM50 million for the Co-investment Fund for Equity Crowd Funding and Peer-to-Peer (P2P) will help start-ups at the seed and Series A funding-level, resulting in the creation of more local tech Intellectual Property (IP).
“PIKOM welcomes the news as the association recognises the growing importance of e-Sports through the formation of our new Special Interest Group on e-Sports in 2019. This is part of our drive to attract the e-gaming community,” he comments on the RM 10 million allocation for e-Sports.
However, Pikom does advises the government to implement the online services tax in consultation with the respective industries.
Starting Jan 1, 2019, the government will tax imported services to ensure that local service providers such as architects, graphic designers, software developers can compete more competitively.
“On exemption of SST on services for B2B, we understand this exemption is to address the cascading effects of the SST for services in specific sectors but we will require more details.
“This would certainly lower the cost to businesses which has been a bane for the industry.”
“In addition to that, we welcome the reduction of tax by 1% as it will increase business spending which will have a ripple effect on the economy.”
PIKOM is however concerned with the lack of incentives for corporate sector (beyond manufacturing sector) in ICT and venture capital for increased start up investment and productivity. This includes tax rebates and exemptions.
“There are also no incentives for personal relief to drive consumer spending. For example, personal tax reduction and Employees Provident Fund withdrawal scheme for purchase of Devices," he concludes.
Devices,” he concluded.