KUALA LUMPUR, Dec 23 — The technology industry should be exempted from the electricity tariff hike to protect consumers and maintain competitiveness, 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.

"Many companies are still struggling to rebuild their businesses post-pandemic. Furthermore, the electricity price hike will contribute to inflation,” he said in a statement.

According to Ong, the imposition of the electricity hike may discourage potential multinational corporations (MNCs) from operating in Malaysia and could also encourage MNCs which are currently in Malaysia to look elsewhere.

The government recently announced that there is no plan to increase the electricity tariff for domestic consumers, small and medium enterprises (SMEs), agricultural companies and food producers.

Instead, the hike in electricity tariff will only be for MNCs and giant companies making huge profits.

Ong noted that while Pikom supports the government’s efforts in its economic recovery and looks into the interests of the people, it hopes that key players in the industry will be exempted from the hike too.

"SMEs, telcos and data centres are essential as they support the growth of the domestic market while driving the digitalisation initiatives of the country,” he said.

If the electricity hike is implemented, Ong suggested that the government may want to consider a subsidy plan or implement the hike in 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 which are employing a lot of highly skilled local workforce,” he added.

Pikom is the largest digital and tech association in Malaysia, representing more than 1000 members that include large tech enterprises, tech SMEs, cloud hyperscalers, software developers, telecommunications companies, data centres, cybersecurity companies and shared services companies. — Bernama