A more holistic approach needed
Cheah Kok Hoong (pic above) , Hitachi Sunway's Information System Group CEO and director, who is also chairman of PIKOM (National ICT Association of Malaysia), agreed the proposals made it very much a 'people's Budget. "This is particularly important amidst falling oil and commodity prices, depreciation of the Malaysian ringgit, goods and services tax (GST) implementation coupled with political instability that has impacted the economy considerably."
"In the realm of enterprise ICT, raising Internet speeds from an average of 5Mbps (megabits per second) to 20Mbps is a welcome measure, which we hope will encourage more enterprises to move into Cloud services. Also it is commendable that there have been allocation to spur digital innovation amongst the young," said Cheah.
"However, all in all Budget 2016 still falls short in addressing the challenges faced by the enterprise ICT industry," he cautioned. "The reality is the current economic landscape has set off a series of chain reactions, which is seriously affecting spending decisions."
"In this sense, we were hopeful that immediate measures such tax allowances, zero-rated GST and even re-investment allowance incentives for companies with export capabilities would be introduced. These would not only encourage continuous investment in technology and increase productivity, it would also provide the opportunity for businesses to compete meaningfully in the domestic as well as international market," added Cheah.
In his capacity as chairman of PIKOM, Cheah said that while PIKOM welcomed some positive steps in Budget 2016 with regards to GST, entrepreneurship, innovation and broadbandm a more holistic approach was require in addressing ICT challenges.
“PIKOM welcomes the Government’s decision to allow prepaid consumers to enjoy rebates up to the GST equivalent incurred when purchasing reload packages. But this is still a far cry from our more comprehensive recommendation to make all ICT products and services zero rated," he said. “It is good that that there is GST exemption for teaching tools for skills and vocational training. But would this also be extended to ICT related teaching tools? We hope to see further clarification on this and it is hoped that GST exemption could also be extended to those who also pursue ICT related training and development courses."
“While there were several measures targeted at addressing rising cost of living, PIKOM would have liked to see some of those measures include the purchase of ICT products and services," added Cheah. "These are necessities that everyone uses and providing some form of subsidy or relief would have gone a long way in helping the man on the street."
“We laud the Government for heeding the call to increase Internet speeds to 20Mbps and to improve the National fibre digital infrastructure. However, speed must come with affordability; an area where Malaysia is lagging behind its regional peers. Without affordability, provision of higher speeds will not be very effective," he continued. "With regard to spurring innovation, PIKOM welcome the tax deductions for R & D initiatives as well as the allocation to various government bodies such as MDV, Inovasi and MaGIC to spur greater innovation within the country. The SME transformation technology fund will encourage SMEs to embrace ICT and move up the technological chain. The green technology fund is also a step in the right direction."
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