The Malaysia Digital Economy Corporation Sdn Bhd (MDEC) launched the “Digital Transformation Acceleration Program (DTAP) on 9 April 2018.  Digital Transformation Acceleration Program (DTAP) was envisioned to future proof Malaysian companies by providing a structured approach to digital adoption to enable companies to remain competitive.  The objectives of digitizing companies are to enhance their global competitiveness, strengthen growth and productivity of manufacturing industries, create high value-added jobs and reduce dependency on foreign labour, as well as to increase the prowess of SMEs.  DTAP is a partnership between MDEC and MIDA, which provides a matching grant to companies that qualify for the program.

Digital Transformation Acceleration Program is a structured approach which allows companies identify pain points and exploits opportunities in digital, and develop potential solutions through lab sessions to design, develop and create proof of concepts. These proofs of concepts are measurable, and outcome based.

The program will be facilitated and managed by appointed Digital Transformation Labs (DTL), where DTLs will provide the structured approach and expertise in executing the program. Emerging technologies will be incorporated where possible. Pilots are to achieve one of these main outcomes; increase productivity, reduce dependency on foreign labor or creation of new sources of growth.

(1st row from the left to right, 4th & 5th seated) Tan Sri Ghazzali Sheikh Abdul Khalid, EXCO MASSA and YABhg Tun Michael Chen Wing Sum, Vice President of MASSA at the event

MASSA representatives who attended the session included its Vice President, YABhg Tun Michael Chen Wing Sum and EXCO member, Tan Sri Ghazzali Sheikh Abdul Khalid.

Datuk Yasmin Mahmud and Dato’ Azman Mahmud gave a detailed presentation of the DTAP journey and encouraged Malaysian companies to consider the positive attributes of embarking on this corporate journey that is expected to reap beneficial rewards.

Gamuda and Top Glove shared their experiential journey with participants.

(left) YABhg Tun Michael Chen Wing Sum, Vice President of MASSA and (right) Datuk Yasmin Mahmud, CEO, MDEC at the event

(left) YABhg Tun Michael Chen Wing Sum and Ms Seah Siew Yun, President, Chartered Tax Institute of Malaysia (CTIM)

Funding and incentives related to smart manufacturing / Industry 4.0:

a) Incentives for the production of robotics and factory automation equipment and specialized production of M&E for specific industry:
• Pioneer Status (PS) with income tax exemption of 100% of statutory income for 10 years or
• ITA of 100% on qualifying capital expenditure incurred within 5 years.  This allowance can be offset against 100% of statutory income for each year of assessment.

b) The Automation Capital Allowance to encourage swift adoption of automation among manufacturing industries:

• For high labour-intensive industries (rubber products, plastics, wood, furniture & textiles) an Automation CA of 200% will be provided on the first RM4 million expenditure incurred within 5 years of assessment from 2015 to 2020;
• For other industries, an Automation CA of 200% will be provided on the first RM2 million expenditure incurred within 5 years of assessment from 2015 to 2020.

c) MIDA Soft Loan Scheme for Automation & Modernisation (SLSAM) to assist manufacturing companies to:
 –  Modernize and automate manufacturing process
 –  Upgrade production capabilities and capacity
 –  Minimize dependence on labour-intensive activities and foreign labour
 –  Diversify into higher value-added activities.

Domestic Investment Strategic Fund (DISF) provides matching grants for:
• Training activities
• R&D activities
• Modernisation / upgrading facilities and equipment
• To comply with international standards
• Licensing/purchase of technology

d) New incentives under 2018 budget:
 –  Matching grant of RM245 million under DISF to upscale Smart Manufacturing facilities;
 –  Accelerated Capital Allowance (ACA) of 200% on the first RM10 million qualifying capital expenditure incurred in the year of assessments (YA) 2018 to 2020 for manufacturing and manufacturing related services sectors;
 –  Capital Allowance for ICT equipment including computer software development expenditure can be fully claimed from year of assessment (YA) 2018 to 2020.