Pikom calls on government to urgently address 3 areas of concern

  • Practical solutions needed to ensure the least disruption to business operations
  • The ICT industry is one of the fastest growing industries in Malaysia


Pikom calls on government to urgently address 3 areas of concern


THE National ICT Association of Malaysia (Pikom) is appealing to the government to urgently address areas of concerns that could have long-term impact on the growth of Malaysia’s ICT industry.

As the new government takes stewardship of the country, emphasis and time should be accorded to implement initiatives for the growth of the ICT industry as well as to offer various benefits for other industry sectors.

This is a timely appeal with positive implications and practical solutions to ensure the least disruption to ongoing business operations.

Pikom chairman Ganesh Kumar Bangah (pic) said, “As the voice of the ICT Industry, Pikom is seeking clarity on these concerns for the benefit of the association’s 1,000 plus members who contribute 80% to the industry’s revenue, which in turn, makes up about 19% of the GDP of the country. The ICT industry is also one of the fastest growing industries in Malaysia.

“During his previous tenure as the Prime Minister, Tun Dr Mahathir Mohamad emphasised the importance of technology for the growth of the country, through initiatives such as the Multimedia Super Corridor.

“Pikom would like to see this emphasis continuing in the new administration. In particular, we would like to see exemption of the Sales and Services Tax (SST) for ICT products, tax-free status for MSC Malaysia-status companies and implementation of the venture capital incentives as announced earlier. “

Reintroduction of SST

The reintroduction of SST is creating a sense of anxiety in the industry as businesses prepare to migrate to the new tax regime. Prior to the introduction of GST on April 1, 2015, the majority of the ICT products were exempted from SST.

These included personal computers, printers, peripherals, projectors and related multimedia products.

Providing Malaysians access to affordable ICT devices is imperative to building a digital economy in our nation and for the industry to be competitive in the asean region.

Pikom hopes that the government will include all ICT products and services in the list of products exempted from SST due to take effect on Sept 1, 2018.

Suspension of MSC Malaysia status applications

The suspension of the MSC Malaysia status application and the resulting changes expected in the Bill of Guarantees (BoGs) is also a cause for concern. The BoGs are defined as a set of incentives, rights, and privileges that reflect the government’s commitment to providing an environment that is conducive to the development of these companies and the digital economy.

As the BoGs were developed to attract investments in the ICT sector, prolonged suspension of the application for MSC Malaysia status will create a business climate of uncertainty among investors.

Pikom is seeking clarity on this matter as the continuing growth of the ICT industry depends on a conducive investment-friendly environment in the country.

Venture capital incentives

The status on the slew of incentives announced in the Budget 2018 to encourage the venture capital activities, has yet to be confirmed. 

The need for intervention and incentives for investments in early-stage and growth-stage businesses are imperative for the development of start-ups, to ensure these companies thrive to the fullest potential.

Pikom organised their inaugural SEA Dragon Venture Platform in May this year for precisely the reason to match investors to start-ups with the expectations that there will be strong support from the government.

Pikom hopes the government will address the above concerns as soon as possible, to put to rest the uncertainties Pikom members and the ICT industry in general are facing in moving their businesses forward.


Related Stories:
Pikom targets RM370mil GMV for #MYCYBERSALE 2018
Malaysian ICT job market recovers in 2017, records higher salary growth
Pikom SEA Dragon Venture Platform to connect global investors with scale ups from Malaysia


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