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Malaysia Budget 2014: ICT industry reactions

AvantiKumar | Oct. 28, 2013
[UPDATED] Malaysia's ICT industry leaders generally welcome the proposals to ramp up internet connectivity and foster human talent as well as encourage overall 'resilient economic growth.'

Mastura - MSTB modified

Malaysia Software Testing Board president Mastura Abu Samah (pic) said of particular interest in the Budget proposals is the Vendor Development Programme (VDP). 

"The proposal to offer better tax incentives to encourage more companies to be an anchor under the VDP augurs well for the Malaysian Software Testing Board (MSTB), particularly on the Malaysian Software Testing Hub (MSTH) Independent Verification and Validation (IVV) Cluster Development Programme, which seeks to increase participation of Malaysian companies in software testing service provision."

"The IVV Cluster development programme is being carried out under the Malaysia Software Testing Hub (MSTH) initiative," said Mastura. "The mid- to long-term vision of the programme is to create a pool of Malaysian companies with high competency and capability to undertake high value-add software testing jobs in the domestic and international markets."

"The announcement of the 1Malaysian Entrepreneurial Nation (1MeT) and the Malaysian Global Innovation and Creativity Centre (MaGIC) are particularly timely to boost the competitiveness and innovativeness of our young entrepreneurs," said Telekom Malaysia's Zamzamzairani.

"In addition, the announcement of the RM120 million [US$6.36 million] allocation for an integrated package to increase innovation and productivity of SMEs is a complements the National Broadband Initiative as it spurs entrepreneurship," said Cisco's Tan. "Organisations and businesses can capitalize on technology solutions, like cloud and telepresence to make more effective decisions and go-to-market faster. Productivity. Efficiency. Profitability. Success."

RICOH - Peter Wee's Photo modified

Digital imaging and print solutions firm Ricoh Malaysia's chief operating officer Peter Wee (pic) the internet and speed boosts in both urban and rural areas as well as the additional telecommunication towers were positive measures. "[The resulting impetus to wireless broadband] would help to increase productivity and efficiency among communities. Business models will have to change for the better to accommodate for this. As more and more people are exposed to information, productivity will increase and enhance our efforts in building a stronger K-economy. As workers become more mobile, the demands for faster, reliable, and cheaper Internet services are important imperatives."

"A holistic approach in terms of looking at the total cost of owning and using mobile technology including the cost of broadband access should be looked at to encourage new investments in technology by businesses," said Wee. "Spearheading a more aggressive adoption of internet utilisation by SMEs would fuel the objective of increasing SME contribution to 41 percent of GDP by 2020.

Masaya Ueno_CEO and President_Rakuten Malaysia modified
Rakuten Online Shopping president and chief executive officer Masaya Ueno (pic) said the national e-commerce landscape would benefit from the Budget 2014 proposals.

Ueno said HSBB2 would also benefit 2.8 million urban households with the increase of internet speed to 10 Mbps. "This is definitely a boon to the e-commerce industry in Malaysia, as it will encourage and enable more people to have seamless access to the Internet. In turn, this will drive greater value creations from the increased connections, capitalising on e-commerce as an enabler while allowing the sector to thrive and grow through its widespread reach across the country."

"We also welcome the government's allocation of RM120 million [US$38.17 million] for an integrated package to increase innovation and productivity of SMEs," he said. "SMEs account for 97.3 percent of total registered businesses, and their contribution is key to Malaysia's GDP. " 

  GST, tax incentives, security

"We laud the government for the courage in announcing the 6 percent GST [government sales tax from 1 April 2015]," PIKOM's Woon said. "It is not an easy decision and the government has shown the resolve in implementing the GST by 1 April 2015. The measures to mitigate the effects of GST implementation were also introduced thereby providing 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," said Woon.

"For the ICT industry, the GST will have an impact wherein some of the ICT components and products were zero tax before and with the 6 percent GST, it will surely have an impact to the consumers as the cost will be passed down," he said.

"With the implementation of GST, a 1 percent reduction in corporate tax will augur well to the business community" said Woon. "A lower tax regime will help establish Malaysia as an attractive destination for foreign investments which is still relatively high compared to countries such as Hong Kong and Singapore. The overall reduction of personal income tax by 1-3 percent is certainly timely for the GST implementation."

"Overall, GST at 6 percent would help widen the country's tax base by generating an estimated RM22 billion [US$7 billion]," he said. "However, 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."


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