Sun Microsystems: Post-Budget Commentary – Malaysian National Budget 2009

CP Loo, Managing Director, Sun Microsystems Malaysia

Kuala Lumpur 29 August 2008

The National Budget 2009 truly reinforces the Malaysian Government’s commitment to alleviate the increasing hardship faced by the rakyat and, at the same time reflects its continual investment for growth to ensure the long-term productivity and resilience of the nation.

Sun especially lauds the Government’s efforts to mitigate the effects of inflation on the cost of living. Specifically, Sun is appreciative of the Government’s decision to grant corporate and personal tax relief of 1% down to 27% and 12% respectively, effective the year of assessment 2009. Tax reliefs provide an incentive for Malaysian professionals to stay in, or return to the country and contribute towards revitalizing the economy.

In addition, Sun is confident that the ICT-related incentives in this year’s Budget will promote an even more vibrant ICT environment and boost the country’s next phase of growth. In particular, we welcome the Government’s decision to shorten the claimable period from two years to one year under the Accelerated Capital Allowance on expenses incurred on upgrading or replacing ICT equipment. This move enables businesses to remain competitive and helps increase productivity.

Sun is also heartened by the Government’s support in the growth of SMEs thus far. Apart from the RM1.2 bil financing facilities allotted for SMEs to upgrade their processes or IT equipment, SMBs would find the one year Accelerated Capital Allowance reduction and the ability to claim full Capital Allowance on all small value assets within a year, extremely positive news. These benefits will not only facilitate cash flow issues faced by SMBs but stimulate the domestic economy and encourage cross-border economic activities.

Furthermore, Sun applauds the Government’s continued focus on enhancing human capital development to make Malaysia more competitive and attractive to foreign investors. Sun believes the RM2.4 billion allocation to enhance facilities as well as undertake training and skills programmes will not only spur entrepreneurial activities amongst unemployed graduates, but also increase the demand for skilled and knowledge workers in the country as we transform towards a knowledge-based economy.

Moving forward, Sun would like to see subsidies allocated for software developers as an encouragement to commercialise their ideas in the global market. We also hope to see additional rebates for companies which seek ways to reduce power and consumption costs and adopt green technology within their organizations. This is particularly relevant to counter escalating energy costs.