KUALA LUMPUR: Tech experts hope Budget 2019 will include initiatives that will accelerate the fourth industrial revolution by developing and regulating the tech industry, as well as promoting digital technology in Malaysia.
The market is abuzz with talk that a digital tax will be introduced in Budget 2019.
This will result in Malaysia being the second country in South-East Asia after Singapore to introduce a tax scheme for the digital sector.
David Low, the country manager of cryptocurrency exchanger Luno, has no qualms about Malaysia introducing the digital tax.
He believes regulating the tech industry is a win-win situation for the government, allowing the authorities to look forward to a new stream of revenue, which would mitigate the debt level of the country.
“It is important for the government to regulate the tech sector, as it would allow them to collect taxes in the industry. If they regulate the industry, it will create more jobs and tech companies will increase their reported earnings,” Low said.
The upcoming budget is slated to be tabled in Parliament on Nov 2.
Despite the adoption of technology by businesses, Malaysia Digital Economy Corp (MDec) chief operating officer Datuk Ng Wan Peng said it was imperative to strengthen and promote the development of the tech industry, particularly for small and medium enterprises (SMEs).
“I think incentives come in many forms, not necessarily it has to be grants or monetary allocation. Like today, we are working with private companies and government agencies.
“We hope the budget would focus on creating a holistic strategy where everyone can contribute to the development of the economy,” she told reporters on the sidelines of the launch of the Malaysia Digital Chamber of Commerce.
In 2016, the digital economy contributed around 18.2% to Malaysia’s gross domestic product (GDP).
Currently, MDec is targeting the digital economy to contribute around 20% to GDP by 2020.
Malaysia External Trade Development Corp (Matrade) director for transformation and digital trade division, Noraslan Hadi Abdul Kadir, is confident the budget allocation for digital space would not be trimmed, as the current government believes the tech sector is the key growth driver for the economy.
“I hope the allocation in the upcoming budget for my division is more so we can expand the scope for digital promotion to SMEs.
“It is not just about companies listing their products online, but it is also about promoting the e-commerce space,” he said.
For this year, Matrade’s transformation and digital trade division was allocated around RM4mil for digital promotion.
Apart from this, tech companies in Malaysia believe that providing grants in the upcoming budget will also boost the country’s position to place itself as a hub for tech companies in the coming years.
“It is time for Malaysia to become a technology-enabled economy.
“We don’t really shout that out,” said Low.
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