ICT products should join the line-up of exempted products in the soon-to-be finalised Goods and Services Tax list, says the National Information and Communications Technology Association of Malaysia (Pikom)
It has submitted its wish list to the Treasury ahead of 2015 Budget which will be tabled in October.
Chairman Cheah Kok Hoong said the recommendation encompasses hardware and software products in the ICT industry.
A six per cent GST slapped on the products could lead to a wave of price hikes in the following six months although the effects would dissipate subsequently.
He was speaking at a media briefing on the sidelines of the Sixth Pikom Leadership Summit.
Pikom has also called for corporate and personal taxes to be cut by one to two percentage points with the implementation of GST.
The association said while the implementation of the GST is expected to push inflation rates up for two quarters, it is also expected to raise the ICT deployment.
It will upgrade existing accounting, budgetary, inventory and human resource systems, especially in the coming months ahead of the tax implementation on April 1.
Despite the impact of the new tax regime, the industry is poised to continue to enjoy its double-digit growth trajectory in 2014.
It is estimated that the industry will grow by 13 per cent in 2014, from 10 to 12 per cent last year, leading it towards the targeted revenue of RM95 billion by 2017.
Cheah said ICT adoption is now seeing an upbeat momentum which could be a result of the GST deadline.
The ICT Strategic Review 2014/2015 report revealed Internet of Things trend will be the next significant revenue stream driver for the industry.
It will be leveraging M2M connections to enable information sharing to improve healthcare services, agriculture, logistics and transportation.
It also sheds light on other core ICT trends such as social technology, big data, cognisant computing and wearable technology revolution.
Meanwhile, the ICT sector continues to be plagued by challenges such as a declining supply of ICT graduates, quality of ICT graduates, low level of innovation and R&D, patent registration and new commercialisation activities.