Posted on 25 October 2013 - 10:02pm
Last updated on 25 October 2013 - 10:26pm
PETALING JAYA (Oct 25, 2013): The National ICT Association of Malaysia (PIKOM) acknowledged that the 6% Goods and Services Tax (GST) to be introduced in 2015 will be passed down to consumers given that some of the ICT components and products did not have any tax currently.
PIKOM chairman Woon Tai Hai said this in a statement today welcoming the 2014 Budget as a fiscally responsible and comprehensive budget that is cognizant of all stakeholders and praising the government for the "courage" in announcing the GST as it is "not an easy decision".
He noted that there were, however, measures introduced to mitigate the effects of the GST implementation to provide "a softer landing" for businesses and consumers.
"Whilst the GST may result a dip in consumption in the early stage as evident in countries that have implemented GST, but in the long run, it will smoothen out and even spur growth in the long run.
"The key is in its execution to ensure good results and better understanding. We are delighted that tax incentives have been extended for GST related accounting and ICT training programmes. The extension of accelerated depreciation for ICT will be of great help to corporations," he said.
However, he noted that a 1% reduction in corporate tax will augur well to the business community.
"A lower tax regime will help establish Malaysia as an attractive destination for foreign investment, which is still relatively high compared with countries such as Hong Kong and Singapore," he said.
He also welcomed the overall reduction of personal income tax by 1-3% as timely, given the GST to come.
He said the business community, especially the ICT sector, would view the Budget 2014 positively.
"This budget addresses the medium and long term needs of the nation," he said.
He lauded the widening the high-speed broadband (HSBB) coverage in the country, including investments of RM1.8 billion for HSBB Phase 2, RM1.6 billion for rural areas with the building of 1,000 transmission towers.
"However, we are still concerned on the overall communications cost as compared to our regional neighbours," Woon said.
Another welcoming point of the budget was its focus on entrepreneurship development, which is "the lifeline to small and medium enterprises and will lead to higher job creation".
"The budget allocated to MAGIC and the development programmes by 1MET will help spur entrepreneurs forward," he said.
Woon also thanked the government for meeting PIKOM's call for a single ICT Ministry.
"With Multimedia Development Corporation (MDeC) now under the fold of the Ministry of Communications and Multimedia, this will mitigate the risk of overlap of accountability between ministries and augur well for the industry," he said.