KUALA LUMPUR – Software developers, telecommunications companies (telcos), and data centres should be exempted from the pending electricity tariff hike on large companies and multinational corporations (MNCs), said the National Tech Association of Malaysia (Pikom).
Chairman Ong Chin Seong said this is because the impact of the tariff increase may eventually be passed down to consumers, as well as discourage potential MNCs from operating in Malaysia.
“Collectively, we feel that imposing the electricity hike will start to discourage potential MNCs from operating in Malaysia and could also encourage existing MNCs to look elsewhere.
“At the same time, many companies are still struggling to rebuild their businesses post-pandemic. The electricity price hike will contribute to inflation.”
He added that Pikom hopes that the government will consider that small and medium enterprises (SMEs), telcos, and data centres are essential as they support the growth of the domestic market while driving digitisation initiatives in the country.
“The government may want to consider a subsidy plan or raise the hike with more strategic phases, such as putting in place a timeframe threshold including tax rebates for companies paying higher tariffs.
“We also need to consider investors such as cloud hyperscalers who are employing a lot of our highly skilled local workforce.
“The price hike will encourage them to move and look elsewhere. The government should view this as an approach to level the playing field for SMEs, large companies, and MNCs.”
Pikom represents more than 1,000 members that include large tech enterprises, tech SMEs, cloud hyperscalers, software developers, telecommunications companies, data centres, cyber security companies, and shared services companies.
Earlier, the Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai appealed for a more gradual and tenable rate hike to ease some of their cost burdens during this period of prolonged uncertainty.
He added that the electricity tariff surcharge hike by more than 44% for medium-voltage (MV) and high-voltage (HV) users will pose major challenges to affected firms for the next six months.
Last week, Natural Resources, Environment, and Climate Change Minister Nik Nazmi Nik Ahmad announced that MV and HV industrial users as well as MNCs would be slapped with a electricity tariff surcharge at 20 sen per kilowatt hour starting January 1, through the imbalance cost pass-through mechanism.
However, the government will still subsidise RM1.93 billion to avoid a significant increase on the surcharge should it be passed on entirely to users.
He added that Prime Minister Datuk Seri Anwar Ibrahim has promised that domestic users, low-voltage users – such as small and medium enterprises – and those categorised as specific agriculture (tariff H) will not face any surcharge. – The Vibes, December 23, 2022
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