What Budget 2017 means for Malaysia's IT industry

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By AvantiKumar
Nov. 21, 2016


"Budget 2017 also offers the start-up community the much needed support of an ecosystem that suits the nature of their business. With the implementation of Malaysia Digital Hubs, they can now enjoy the full benefits of the MSC Bill of Guarantees, including tax incentives. In tandem with growing the local startup community in Malaysia, efforts to attract Foreign Knowledge Tech Entrepreneurs to Malaysia will definitely catalyse the nation's growth," she said.

"We will also be the first country in the world to introduce the Digital Free Trade Zone," Yasmin added. "For the first time, the world will have a physical and virtual zones with additional online and digital services to facilitate international eCommerce and invigorate internet based-innovation," added Yasmin. "With these measures, we look set to make the most out of the Internet Economy next year; and take a step closer to becoming a fully sustainable developed digital economy nation."

Missed GST opportunity?

Chin Chee Seong (CS Chin)_PIKOM Chairman  

Chin Chee Seong, (pic above) chairman of the National ICT Association of Malaysia (PIKOM), said the industry association "certainly welcomed the announcement of higher broadband speeds at existing prices and plans to reduce prices at double the speeds is long overdue. This is the right step."

However, Chin said, "The government's decision to not make ICT goods and services GST zero rated is a missed opportunity to really benefit almost all Malaysians."

"While allocations of RM1 billion (US$240 million) have been made to ensure that broadband speed hits 20 megabytes per second nationwide, we hope the implementation will be swift. We also welcome the increase in facility for public servants to RM5,000 (US$1,195) for smartphone purchase once every three years," Chin said.

"The provision of RM2500 (US$598) lifestyle tax relief for various items including smartphones and tablets and broadband purchase is spot on," he added. "PIKOM has been calling for the current relief to be extended to include smartphones and available at a closer interval. This is a welcome move but the amount should be higher considering the typical Malaysian family, especially for urban families. It is a good move all the same and will certainly help the middle income of M40 group."

"The focus on ecommerce and startups also bode well for the industry will serve as a catalyst for further growth," said Chin.

"We will continue to emphasise the need for ICT goods and services to be zero rated under GST as a means to help the rakyat," he said. "Today, these are necessities that everyone uses and providing some form of subsidy or relief would have gone a long way in helping the man on the street."

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