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.
