THE National ICT Association of Malaysia (Pikom) is urging the Government to improve the affordability and availability of ICT goods and services to benefit the man on the street, given the current economic challenges and rising cost of living.
“Given the prevalent use and consumption of ICT today on a daily basis, the following measures recommended below will have a cascading effect not just on spurring the ICT industry but to also benefit almost every Malaysian,” said Pikom chairman Chin Chee Seong.
“In addition, given the Government’s welcome move to introduce coding in schools, it is all the more imperative to ensure that ICT goods and services are affordable for Malaysia’s over five million schoolchildren, not forgetting their families.
Pikom suggested GST exemption for ICT products and services, saying tax, coupled with the weakening ringgit, had resulted in a slowdown for the local ICT retail sector.
“While it has impacted the retail sector, the most affected are the SME companies which contribute some 31% to national GDP employing about 56% of the local workforce,” Pikom said.
Prior to the implementation of GST, prices of ICT products did not attract any sales tax which has changed from April 1, 2015.
This has resulted in consumer demand for ICT goods and services decreasing as prices became more expensive, it pointed out.
Exemption from the 6% tax would be a tremendous saving that would not only directly boost ICT demand but also encourage the continued development of a connected and knowledge based community, it said.
Pikom also said ICT training should be encouraged with tax deduction.
“Malaysia’s ICT sector continues to face a brain drain challenge as revealed under the PIKOM ICT Job Market Outlook in Malaysia 2016 report. It is imperative that more talent be upskilled and trained accordingly to fill the gaps,” it said.
Pikom proposed allowing double tax deduction on cost incurred (up to a capped amount) for individuals pursuing ICT-related certification programmes.
Companies should also be allowed to claim double tax deduction if they had to bear the cost of the training.
Its third proposal was for greater incentives for ownership of ICT goods and services
“In addition to zero-rated GST for ICT goods and services, Pikom recommends allowing income tax deductions of RM3,000 once every two years for PCs and smartphones instead of the current three years.
“The primary source of connecting to the Internet has evolved from the PC to a mobile device with an increasing number of connected people, on the go.
"Smartphone penetration has reached the 140%-150% level and the usage of mobile phones to access the internet is around 63%,” it explained.
It said policies should be brought in sync with present trends and the incentive be extended to smartphones given the rise of mobile devices as the ICT device of choice.
Finally, Pikom suggested that there be an EPF withdrawal scheme for ICT products, services and broadband.
“We recommend reintroducing the EPF withdrawal scheme to purchase computing products, peripherals and consumables with a clear list of items and services to prevent abuse.
“Mechanisms can be put in place to ensure that only trusted parties are involved in the scheme,” it said.
“And while Pikol lauds the Government’s continual efforts to make broadband more affordable, more effort is needed to bring the cost of Internet connectivity in Malaysia on par with other regional peers.
“Given the importance of high-speed broadband to the nation and its people, this area requires further and timely action.
“Pikom recommends that the Government take further action to foster greater industry competition and to regulate pricing of broadband rates in Malaysia.
“A regional benchmarking comparison should be in place to ensure that we remain a competitive ICT nation. This should cover speed, coverage and quality of service,” it said.