PIKOM expects ICT sales to drop 30% post-GST

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KUALA LUMPUR (March 24): The National ICT Association of Malaysia (PIKOM) said ICT sales could drop by up to 30% after the implementation of the goods and services tax (GST) on April 1.

In a statement today, PIKOM said it expects price hikes across a large number of hardware, software and service offerings post-GST, as technology products are currently zero-rated under the current sales and service tax system.

“We estimate that the next six months will see a general ‘dip’ in the purchases of hardware and gadgets such as smart phones, PC, laptops, printers and other peripherals by households and consumers.

“We expect smaller companies, in particularly small and medium enterprises (SMEs), to be more affected by the GST, with most delaying their ICT investments for now. Overall, we anticipate a drop of up to 30% in the market,” said PIKOM chairman Cheah Kok Hoong.

However, he expects no great impact on purchasing and investment decisions by larger companies, as the 6% charged by suppliers can be claimed as input tax from the Royal Malaysian Customs Department.