Internet Alliance (‘IA’), a not-for-profit organisation that facilitates about 85% of Malaysia’s active Internet scene, lauds the ‘Cloud-First’ strategy for government agencies and public sector to boost the digital economy.
Announced by the Prime Minister just before the upcoming Budget 2018, “Cloud-First” would become part of the National Agenda, starting with the public sector.
The ‘Cloud-First’ strategy fundamentally involves the adoption of cloud for government agencies to rapidly deliver innovative public sector services without incurring high levels of capital expenditure to invest in the IT infrastructure such as data centres, services and storage.
President of Internet Alliance, Chan Kee Siak says, “We at IA, are thrilled that the government recognises how the cloud is fundamental to digital transformation. The Cloud has become a powerful and cost-efficient method to de-liver ICT solutions and services to support the economy. Therefore, prioritising govern-ment agencies to adopt Cloud-based ICT solutions, sets a strong example of how to free from the high costs of initial equipment investments.”
At the same time, Chan calls on the government to consider lowering or exempting with-holding tax for local organisations wanting to adopt Cloud or other Digital Services.
He says that currently, Malaysian companies and organisations which want to adopt Cloud technologies or deploy Digital Services by foreign vendors – have to pay an additional 10% withholding tax on top of the fees they already have to pay to foreign Cloud providers.
“Some common instances of Malaysian companies incurring this additional 10% withhold-ing tax are when a) Advertising with Google and Facebook b) Subscribing to overseas’ Software-as-a-Services (SaaS) and/or foreign Cloud services such as Amazon Web Ser-vices (AWS) and Alibaba Cloud) Purchasing software licenses.
If the ‘Cloud-First’ strategy is to be a successful National Agenda, there should be eco-nomic incentive to boost it too. Therefore, Internet Alliance highly suggests that by lowering or even abolishing this additional withholding tax for Malaysian businesses, they will feel incentiv-ized to accelerate their adoption of Cloud-based services and digital services.”
Chan also encourages and wishes that local government agencies and businesses to en-gage services from local Malaysian Cloud providers, be it Software-as-a-Service (SaaS) or Infrastructure-as-a-Service (IaaS) Cloud models.
Together with the implementation of strategic taxation policies such as reducing or abol-ishing this withholding tax, encouraging public agencies to adopt a ‘Buy-Local’ mentality will also collectively boost the ‘Cloud-First’ towards a higher rate of success under the National Agenda.”