Budget 2025 Accelerates Malaysia’s Transformation in AI
Budget 2025 Accelerates Malaysia’s Transformation in AI
MyDIGITAL Corporation to Establish the National Artificial Intelligence Office
and Lead the Proposal for ASEAN AI Safety Network
Putrajaya, Malaysia, 22 October 2024 – MyDIGITAL Corporation welcomes the Budget 2025 announcement viewing it as a significant step forward in positioning Malaysia as a regional leader in AI-driven innovation, economic growth, and quality of life enhancement.
Aligned with the Ministry of Digital’s efforts to create a trusted, secure, and innovative digital ecosystem, Adrian Marcellus, CEO of MyDIGITAL Corporation, commented, “Budget 2025 fosters a conducive environment for accelerating AI adoption. With the support of incentives and R&D initiatives, companies can enhance their competitive edge, scale operations, and drive Malaysia’s digital transformation.”
He also emphasised the pivotal role of the ASEAN AI Safety Network, stating, “The allocation for this network underscores Malaysia’s leadership in ensuring the safe and ethical development of AI across ASEAN member states. This initiative reflects our commitment to fostering responsible AI practices that mitigate risks and unlock AI’s economic potential for the region.”
Furthermore, the RM10 million allocation for the establishment of the National Artificial Intelligence Office (NAIO) will be instrumental in positioning Malaysia as an AI leader. “NAIO will serve as a central authority, ensuring coordinated and strategic alignment of Malaysia’s AI efforts,” he added.
Driving the Growth of AI Adoption
Budget 2025 places a strong emphasis on promoting high-tech sectors, including AI, robotics, and the Internet of Things (IoT). Companies can benefit from tax incentives and R&D support, encouraging local talent development and collaboration across industries to boost technological advancements and operational efficiency.
Key opportunities for companies in Malaysia include (see details in Appendix below:)
- Tax Incentives for High-Tech Companies: Special tax deductions for training, development, and job creation.
- Incentives for R&D and Innovation: Double tax deductions for AI-related R&D and strategic investment fund for talent development.
- Skilled Foreign Talent: Simplified processes for hiring foreign graduates in AI and other advanced technologies.
- Educational Collaborations: Strategic partnerships with universities and TVET institutions for specialised training programmes.
ASEAN AI Safety Network
The proposal for the formation of ASEAN AI Safety Network is integral to institutionalising the AI governance and ethics principles as endorsed by the ASEAN Digital Ministers. It will support the implementation of the forthcoming ASEAN Responsible AI Roadmap (2025-2030) and facilitate collaboration among governments, businesses, academia, and civil society in ASEAN and with Dialogue Partners, for the exchange of best practices and multi-stakeholder partnerships.
National Artificial Intelligence Office (NAIO)
The National Artificial Intelligence Office (NAIO) serves as a central authority to unify efforts in enhancing the use and development of AI technology in the country. It will be incubated in MyDIGITAL Corporation in its first year of operation.
NAIO will coordinate the continuity of strategies and implementation of artificial intelligence technology through the AI Technology Action Plan 2026 – 2030, which is aimed at increasing innovation and competitiveness of Malaysia’s AI ecosystem.
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Mengenai MyDIGITAL Corporation
MyDIGITAL Corporation is a monitoring agency and operates as a Strategic Change Management Office under the Ministry of Digital, overseeing the implementation of the Malaysia Digital Economy Blueprint (MDEB) and the National 4IR Policy. It serves as the secretariat to the National Digital Economy and 4IR Council, chaired by the Prime Minister, and hosts the Malaysia Centre for the Fourth Industrial Revolution (MYCentre4IR) in collaboration with the World Economic Forum. MyDIGITAL is a dynamic platform aimed at accelerating the adoption of 4IR technologies and fostering innovation.
Media Contact:
MyDIGITAL Corporation
Norhani Ahmad Jaya
norhani.aj@mydigital.gov.my
MyDIGITAL Corporation
Yu Wui Wui
wuiwui.yu@mydigital.gov.my
APPENDIX
Malaysia Budget 2025: Opportunities for Companies in AI
- TAX INCENTIVES FOR HIGH-TECH COMPANIES
- Training and Development: Companies can benefit from special tax deductions if they develop new courses or engage in training related to emerging technologies such as AI, robotics, digital technologies, IoT, and sustainable technologies. This incentive will encourage universities and private training institutes to collaborate with AI firms, fostering a more skilled workforce.
- Job Creation: Companies offering high-paying jobs, especially in fields like AI and data science, will receive targeted tax incentives. This encourages companies to hire local talent and upskill their workforce in cutting-edge technologies, thus benefiting from financial relief through tax breaks.
- Training and Development: Companies can benefit from special tax deductions if they develop new courses or engage in training related to emerging technologies such as AI, robotics, digital technologies, IoT, and sustainable technologies. This incentive will encourage universities and private training institutes to collaborate with AI firms, fostering a more skilled workforce.
- INCENTIVES FOR R&D AND INNOVATION
- Investment in AI R&D: Companies that engage in research and development (R&D) to create new AI-driven products or services can benefit from double tax deductions on R&D expenses. This policy aims to support local innovation and product development, ensuring that companies can reinvest saved funds into furthering AI advancements.
- Strategic Investment Fund: A new strategic investment fund worth RM1 billion has been established to increase the capacity of local talent and encourage companies to engage in high-value activities. Companies focusing on creating technologies related to smart manufacturing, health tech, and green solutions can tap into this fund.
- Investment in AI R&D: Companies that engage in research and development (R&D) to create new AI-driven products or services can benefit from double tax deductions on R&D expenses. This policy aims to support local innovation and product development, ensuring that companies can reinvest saved funds into furthering AI advancements.
- SKILLED FOREIGN TALENT
- Easier Hiring of Foreign Graduates: Companies will also benefit from a simplified process for hiring foreign graduates from local universities. The Malaysian Investment Development Authority (MIDA) will streamline the process for issuing employment passes for skilled workers in strategic sectors like AI, making it easier to fill talent gaps.
- EDUCATIONAL COLLABORATIONS
- Strategic Collaborations with Universities and TVET: Companies can collaborate with public universities and Technical and Vocational Education and Training (TVET) institutions to offer specialised training programmes. This can help build a steady pipeline of skilled AI workers and innovators, with government support to co-develop educational content and internships tailored to the sector.
- Strategic Collaborations with Universities and TVET: Companies can collaborate with public universities and Technical and Vocational Education and Training (TVET) institutions to offer specialised training programmes. This can help build a steady pipeline of skilled AI workers and innovators, with government support to co-develop educational content and internships tailored to the sector.