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The industry reacts: How will Budget 2018 change Malaysia’s IT industry?

AvantiKumar | Nov. 2, 2017
Budget 2018 Special includes leaders from MDEC, IDC, PIKOM, MaGIC, Gartner, Accenture, DHL Express, AJ Pharma, OutSystems, Trend Micro, 3M, iMoney, Cisco, CA Technologies, Microsoft, Lazada, 11Street, and Canvas Instructure.

"To be candid, there’s not a great deal yet that we can talk about when it comes to the private sector driving their own digital initiatives," he continued. "While we are starting to see this in spots, there seems to be too ‘wait and see’ attitude from certain segments looking to policies favouring their interests. To move forward on the transformational evolution curve, policies and sectors need to be increasingly aligned to achieve a greater level of motivation: this can only lead to brilliant things for the country.”

Chin Chee Seong (CS Chin)_PIKOM Chairman 2016-2017

The National ICT Association of Malaysia (PIKOM) Chairman Chin Chee Seong (pic above) said  Budget’s focus on Transformasi Nasional 2050 (TN50) will have a positive impact on the ICT industry. Also, the announcement that Malaysia is to host for second time the World Congress on IT (WCIT) in 2020 is welcome.

Complementing the prime minister’s announcement that the economy is expected to grow by 5.2 percent in 2017, Chin zeroed in on the following business initiatives:
• RM200 million allocation to Malaysian Investment Development Authority (MIDA) for high impact projects;
• RM2 billion fund for Industrial Revolution (IR) 4.0 with 70 percent government guarantee;
• RM200 million for training for SME Corp;
• RM150 million for export including the Market Development Grant (MDG);
• Startup funds for VCs including RM1 billion fund.
“PIKOM is also pleased to note that the government has placed more emphasis on human capital development in 2018 especially on coding in schools,” he continued. “In addition to STEM education, there is an allocation of RM250 million for teachers’ training and RM190 million to upgrade 2,000 classes into ‘21st century smart classrooms’ in order to enhance creative-based learning and innovative thinking."

“We also welcome Capital Allowances for ICT equipment, which will include spending on software development, claimable for a period of four years as this will boost the companies’ productivity and reduce the cost of operation," said Chin, adding that other incentives that will benefit the ICT industry include:
• RM1 billion for Sabah and Sarawak for broadband infrastructure;
• ICT projects in PDRM of RM170 million and RM100 million for communications systems;
• RM 100 mil allocation for e-rezeki, e-usahawan and e-ladang;
• Industry 4.0 and Digital Economy – RM245 million for smart manufacturing;
• Cyberjaya Futurise Centre to be strengthened;
• DFTZ focus on 1500 SMEs and RM83.5 million funding and de minimis increased to RM800;
• Boost startups with setting up of regulatory sandboxes.
“However,  PIKOM had hoped that there would be measures to drop the cost of broadband services as well as GST exemptions on ICT products and services which were not announced in Budget 2018," he added.


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