Page 23 - AMMI Annual Report 2016

AMMI’S COLLECTIVE FEEDBACK
Subject : 2017 Budget Incen ve Proposal for MITI and MIDA
Submi ed : 4 April 2016

ISSUES AND PROPOSALS

ISSUE 1: Incen ves for in-house R & D ac vi es in Malaysia are based on an outdated paradigm.
The incen ves are limited to qualifying capital expenditure with no regard to intellectual assets.
The incen ves remain una rac ve to companies that are engaged both in R & D and manufacturing in
Malaysia.
PROPOSAL : To review R & D incen ves to make it a rac ve for companies to bring more R & D ac vi es
to the country. The incen ves should be extended to approved R & D centres and must include
manpower and IP (Intellectual Property) costs. Cost of joint research with universi es and research
centres should further be encouraged through the provision of grants.

ISSUE 2: Automa on Capital Allowance - current threshold is too low for medical device companies and
glove manufacturers.
NOTE
Category 1: For high labour intensive industries (rubber products, plas cs, wood, furniture and tex les),
an automa on capital allowance of 200% will be provided on the first RM4 million expenditure incurred
within 3 years of assessment from 2015 to 2017; and
Category 2: For other industries, automa on capital allowance of 200% will be provided on the first RM2
million expenditure incurred within 5 years of assessment from 2015 to 2020.
PROPOSAL: To increase the ceiling of capital allowance expenditure to RM 10 million

ISSUE 3: There are currently too many restric ons and condi ons a ached to the off-take agreement
where the government (Ministry of Health) agrees to buy medical devices that are manufactured in the
country for the first me – making the incen ve una rac ve.
PROPOSAL: The policy must give due regard to investments made by both local companies as well as
mul -na onal companies in the country over imported products or local products with cursory local
content.

ISSUE 4: Limita on on MIDA’s Training Grant – the grant is currently based on the ini al investment
project by a new company and limited up to first five (5) years of opera ons.
PROPOSAL : The training grant should be extended for new products or new technology transfers instead
of being constrained by total company basis. This will help medical companies to con nue to expand and
transfer new technologies and products to Malaysia.

AMMI Annual Report 2016 21