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Saturday, June 23, 2012

Medical device makers want tax perks review

Publication: NST
Date of publication: Jun 23, 2012
Section heading: Business Times
Page number: 004
Byline / Author: By Marina Emmanuel

GEORGE TOWN: Medical device makers in Malaysia are asking the government to review the tax incentives currently offered to them, to facilitate the flow of more investments to the country.

Contending that current incentives are only tied to long-term capital investments committed by an investor, the Association of Medical Industries (AMMI) is also asking for incentives in research and development to be tied with other components like talent development and patent filing.

Incoming AMMI chairman Hitendra Joshi yesterday said with increased research and development reinvestments expected from some of its members in the next two to three years, Malaysia stands in good stead to move up the value chain and serve as a global research and development hub.

We should not only serve as a production board for medical device makers, but instead offer an environment and supporting incentives since the growth for the medical devices sector in Malaysia looks promising, he told reporters after outgoing AMMI chairman Daniel Lim presented the association's 2011 findings of an industry survey.

Hitendra said AMMI's wish-list for Budget 2013 has been conveyed to the government and this included the request that once Malaysia implements its Goods and Services Tax (GST) structure, medical devices should be placed in the same zero-rated category as pharmaceuticals.

Zero-rated supplies are taxable supplies which are subject to a zero rate, which is not liable to GST at the output or input stage.

Established in 1989, AMMI is made up of 43 member companies which collectively account for over 60 per cent of the country's RM11.7 billion total export revenue for medical devices. Its members include names like B. Braun, Dupont, 3M, Teleflex and St Jude Medical.

These companies and a host of others are located in the Northern Corridor Economic Region and Klang Valley.

Lim said there also appears to be a third cluster of medical device makers emerging in the Iskandar Development Region in Johor, with the entry of several players.

When presenting the findings of AMMI's 2011 Industry Survey, he said member companies last year had chalked up RM4.9 billion in sales, employed 21,952 people and boasted cumulative investments of RM2.82 billion.

Of the total investment, RM45 million was in research and development, Lim added.

He said the industry is positive about registering RM5 billion in sales this year. The outlook for medical devices - including glove production from Malaysia - continues to look positive until 2015.

AMMI wants govt to relook policy for investments in R&D

Posted on 23 June 2012 - 05:32am

GEORGE TOWN (June 22, 2012): The Association of Malaysian Medical Industries (AMMI) wants the government to relook the policy for investments in research and development (R&D) activities in the 2013 Budget, which will be tabled in Parliament on Sept 28, 2012.

Its chairman, Daniel Lim, said AMMI has submitted its wish list to the Ministry of International Trade and Industry and Malaysian Investment Development Authority to ensure efforts in enhancing the industry.

"Among the highlights would be the broadening of the incentives for R&D-related activities in order to move up the value chain of the industry," he said at a media briefing here today.

Lim said incentives should not only be for product development as Malaysia has the potential to become a R&D centre for medical devices as large anchor companies had been based here for over
15 years. AMMI secretary, Hitendra Joshi, said the government should look at the incentive structure and consider innovation and modernisation in order to further improve the industry.

He said current incentives for R&D-related activities were old-fashioned as they focused on equipment. The incentives should also look at talents, pattern procurement or pattern filing, he said.

Hitendra said AMMI has also requested that medical devices be categorised under goods and services tax (GST) zero-rated, similar to the pharmaceutical industry.

Lim said industry sales were likely to hit RM5.2 billion this year from RM4.9 billion in 2011 amid growing demand for medical devices and positive growth in healthcare segment.

Furthermore, the government has recognised it as one of the industries that would help the country achieve high-income and developed status by 2020.

Lim said Malaysia was among the preferred destinations for medical devices and provided a platform to enter the Asian market. – Bernama