PIKOM announces ICT sector 'Wish List' for BUDGET 2016

 Cheah Kok Hoong, PIKOM Chairman and key spokesperson for the ICT Sector

With just three more days for the upcoming Budget 2016 (23 October 2015), the National ICT Association of Malaysia (PIKOM) have prepared a few recommendations or 'Wish List' to the Malaysia government for the budgetary plans of the ICT sector next year.

•  ICT Products and Services to be GST Zero-Rated ~ After the Goods and Services Tax (GST) Act was implemented, there is an estimated 30% drop in demand from customers because of the increased computer and related technology gadget prices. Furthermore, with the Malaysia ringgit weakening against the USD (US Dollar) and other major currencies. Both the a) SME sector, and b) Rural and Underprivileged communities are affected heavily.

• Broadband Rates for Individuals, Households and Businesses to be reduced ~ While the government's continual efforts to provide affordable broadband is much appreciated, it is not effective enough with the high cost of Internet connectivity in Malaysia (see the chart below for comparison)

• In today’s society, broadband has become a part of our lives to keep us connected in real time environment. It so also akin to the lifeblood of the ICT Industry and the community as a whole. PIKOM believes the overall advancement of the local economy will boost greatly is the Content, Data and Transactions are more affordable. 

• PIKOM strongly recommends the government to regulate pricing of broadband rates by telcos and foster the competition among the players. This is to encourage a greater uptake of broadband and not divide the society especially the underprivileged communities in the rural areas.

• Cost & Transparency of Process for Participation in GLC Tenders to be standardised ~ To discourage genuine bidders, especially those from smaller companies. PIKOM hopes the current cost of up to RM10000 for tender documents will be reviewed to ensure that only serious bidders should be allowed to partake the ICT Industry business. This also includes a uniform and standardised cost for tender documents.

• PIKOM recommends enhancing the tender process in GLCs in creating greater uniformity, consistency, transparency and integrity within the procurement exercise. 

• Spurring Local ICT Market ~ PIKOM recommends the two following items to suppress the impact of GST on ICT products and services, in order to spur the local ICT Market.
  • To encourage Talent Development and Training: To allow companies to claim HRDF on the same, individuals who are pursuing ICT-related certification programs should be allowed to have a personal tax rebate / deductions on cost incurred (up to a capped amount).
  • To encourage adoption and usage of ICT Products, Services and Broadband: PIKOM recommends the income tax deductible amount to be increased for purchase of PCs and laptops for personal use to RM4000 (from current RM3000). In addition to that, PIKOM also the EPF withdrawal should be revisited again in order to prevent abuse with the purchasing of computing products, peripherals and consumables (i.e. PCs, laptops, smart phones and tablets) including broadband subscription with a clear list of items / services.