THE National Tech Association of Malaysia (PIKOM) welcomes the government's initiatives in 2025 Budget, many of which align with the organisation's recommendations submitted earlier this year.
However, there remain areas where further enhancement is needed to fully equip the nation for the digital economy.
Pikom, in a statement, said there are a number of notable additions in the Budget that address several key proposals from its 2025 Budget Memorandum, which include:
1. National fund-of-funds: The RM1 billion allocation to boost venture capital for tech startups is a positive step, directly supporting our call for more investments in emerging tech sectors. This will foster innovation and empower local startups to scale, especially in high-growth areas like AI and robotics.
2. SME digitalisation: The allocation of RM50 million for SME digitalisation is appreciated but it is reduced from RM100 million in 2024, which impacts digital transformation in SME industry. We recommended increasing the grant to RM20,000 for small businesses and providing tailored funds for mid-sized companies to support digital marketing and automation investments with double tax deduction in their digitalisation expenses. We urge the government to expand this support to ensure wider adoption among SMEs and mid-sized companies, which remain under-digitalised.
3. Women returning to the workforce: Pikom applauds the 50 per cent tax deduction for companies hiring women returning to work. This aligns with our push for greater financial incentives to encourage women to re-enter the workforce with digital skills, contributing to a more inclusive tech sector.
4. Cybersecurity and the need to address the increasing number of scams were also provided additional resources in particular RM 10 million for additional 100 new hires at NACSA.
5. The Budget also touched on the need for high-value FDI such as in AI that provides high-income jobs and technology adoption. We are also glad that the Prime Minister acknowledged that data centre investments must also benefit the local economy and industry.
6. In addition, recognising investment in preparing for e-invoicing, the accelerated depreciation allowance over two years is lauded.
However, it said several critical recommendations were not fully addressed:
• Public sector digitalisation: There was no clear increase in public sector technology spending or a comprehensive roadmap for technology-driven transformation, a key pillar in our recommendations to counter global uncertainties and boost national productivity.
• Export support for tech companies: While export funds via Matrade and EXIM Bank are available, Pikom said it had proposed dedicated funding for tech exports and the reintroduction of the Brand Promotion Grant to help local companies expand internationally. These measures would better position Malaysia's tech industry on the global stage.
• Talent development: Pikom recommended a double tax deduction for digital skills training, which was not included. While we commend the allocation for upskilling through various agencies, we believe more direct incentives for companies investing in their workforce would accelerate industry-wide talent growth.
Pikom said the Budget 2025 sets a positive trajectory for economic growth, but there is room for more targeted support in areas such as public sector digitalisation, SME growth, startups, growth of local champions and tech exports.
STU/ AHMAD UKASYAH