Kuala Lumpur: IBM Malaysia, KPMG, and EY applaud the government in its efforts to facilitate the digital transformation of SMEs and micro SMEs which is evident in Budget 2021. They also share their thoughts on aspects such as new GTC incentives and future of home ownership.
Upskilling Is Necessary
“Due to rising demand for digital tools and processes, there is an urgent need for people to upskill themselves with knowledge of digital technologies coupled with digital literacy and transferable skills,” says IBM managing director, Catherine Lian.
She stresses attention should also be placed on emerging roles due to a shortage of qualified talent within Malaysian and region wide. “Emerging roles like data analysts together with artificial intelligence (AI), machine learning, robotic and cybersecurity specialists are growing in demand,” Catherine adds.
“Automation is a double-edged sword while it improves productivity it also threatens various existing jobs. Hence, the need for immediate upskilling of present employees and job-seekers to become what the industry terms as ‘new-collar or workforce of the future,” she explains.
KPMG Malaysia, Head of Tax Tai Lai Kok supports upskilling as necessary and the allocation of RM300 million towards driving an online trading environment for local manufacturers and traders as traditional methods of doing business are rapidly getting outdated and risk being left behind in a globalised world where virtually anything can be purchased online.
“Opening up our goods to the outside world using technology will do wonders to enable our locally made goods to enter markets that were inaccessible in the past,” he adds.
EY Private Tax and Financial Services Leader Bernard Yap says, “It is time SMEs embrace automation and digitalisation in their operations because of the additional RM150 million allocated under the SME Digitalisation Grant Scheme and the Automation Grant.” Bernard explains the RM150 million allocated for the Shop Malaysia Online initiative will cause SMEs and MSMEs to be more inclined to make a digital transformation. The government also acknowledges the need for workforce upskilling in the digital environment, allocating RM100 million for ICT training for Malaysians.
The upskilling and reskilling of youth and workers will create better opportunities and be more productive in their jobs and businesses, he observes. EY comments on GTC GTC incentives “Claims that the relaxation of tax incentives conditions for Principal Hub (PH) will help position Malaysia as a regional or global hub to conduct strategic management, control and support functions,” according to EY Asia-Pacific Tax Leader Yeo Eng Ping. “The generous tax incentives also encourage companies to use Malaysia as a procurement or distribution hub, while allowing investors performing more complex and greater value-add functions to continue using the PH model which has lower concessionary tax rates,” Yeo adds.
“In order to capitalise on investment opportunities, it is crucial that detailed and clear guidelines are issued as soon as possible. Malaysia’s investment agencies should mobilise to educate and support prospective investors and the application processes should be as straightforward as possible,” she stresses.
“One of the points that the government needs to consider is to monitor the global developments to ensure that the incentive regime remains the best-in class,” she suggests. Another innovative proposal in the Budget 2021 involves the granting of limited tax deduction to individuals for amounts invested in Equity Crowd Funding ventures. Equity Crowd Funding has been around for a while and it is interesting to see an incentive being introduced to give a boost to this sector.
The Securities Commission Malaysia will be involved in monitoring these Equity Crowd Funding venture to give some degree of comfort and assurance to investors who may wish to participate. Knight Frank, PAM: home ownership will improve Knight Frank Malaysia Managing Director, Sarkunan Subramaniam observes that the proposed full stamp duty waiver is expected to spur more activities in the primary and secondary residential markets, further supported by the current low interest rate environment.
“This is a great move as eliminating stamp duty will lower upfront cash payments and encourage home ownership among the first-timers. As this enhanced exemption is not limited to the primary market, first-time homebuyers will have wider choices to explore listings in the secondary market,” says Sarkunan.
Pertubuhan Arkitek Malaysia (PAM) agrees that the incentives will stimulate the construction industry and spur other related activities in the supply chain. The allocation under rural development budget will also help to improve the construction industry with RM2.7 billion allocation for infra-structure development and house improvement budget in the rural area. According to these professional bodies Budget 2021 is a step in the right direction for the long-term economy of Malaysia.