KUALA LUMPUR: The National Information and Communications Technology (ICT) Association of Malaysia (Pikom) is proposing to the government to exempt ICT products from the Goods and Services Tax (GST).
In its submission for the 2015 Budget wishlist to the Finance Ministry, the association also proposed a reduction in personal income tax and corporate tax of between one and two percentage points to cushion off the GST effect, said chairman Cheah Kok Hoong.
“We are proposing to remain status quo, which is not to impose GST on ICT gadgets such as smartphones, handsets or software,” he said in press conference held in conjunction with the sixth Pikom Leadership Summit.
If these ICT products were to be subjected to the six per cent GST, to be enforced on April 1, 2015, Pikom expected a wave of price hikes would happen in the first six months before easing over the long run.
Pikom has also proposed to reduce corporate and personal taxes by one to two percentage points to cope with the expected rising costs of living and doing business after the enforcement of the GST.
Pikom released a survey in April, saying that out of more than 1,000 companies it polled, 75 per cent of them accepted the GST new tax regime as a better form of indirect tax compared to the current Sales and Service Tax model.
However, the survey showed that less than 50 per cent were ready to adopt the system from the perspective of workforce, IT system and business processes. — Bernama