4As Budget 2023 wish list

Association wants govt to provide tax reliefs for ad spend

“The ad industry is already self-policing, guided by a set of by-laws jointly thought of by industry experts and the relevant government authoritiesandthisshouldbe enough for all to work with.” Datuk Johnny Mun

PETALING JAYA: The Association of Accredited Advertising Agents (4As) is calling on the government to provide tax reliefs, among others, under Budget 2023 for brands to increase their advertising spend.

Its president Andrew Lee told Starbiz that the advertising and marketing industry wants the government to make some efforts to encourage brands to increase their advertising spend as it is the seed to revive the country’s economy.

“For the past three years, the industry has appealed to the government for two key tax reliefs, a temporary sales and service tax (SST) exemption for advertising spend and costs and a double deduction relief of advertising expenditure spent with Malaysian-owned companies to be exempt from claims submission and extension of qualifying criteria for a tax deduction.

“These reliefs would create the desired multiplier effect on the entire value chain of the advertising and marketing industry.

“It will enable brands to increase their advertising activities to encourage consumer spending and, in the process, boost business for advertising agencies, media agencies and media owners as part of the economic recovery,” Lee, who is also Havas Immerse Malaysia group managing director, added.

Entropia founder and senior partner Prashant Kumar said the time is ripe for Malaysia to build globally renowned consumer brands that create sustainable high margins. Japan did it in the eighties, South Korea has done it in the last 20 years, and Malaysia has to follow suit if it wants to excel internationally.

“It’s almost a rite of passage for raising national productivity and hence per capita income to developed status.

“To build Malaysian global renowned brands, the government could provide relevant incentives that will spur consumer demand in a decisive way and not just limited to raising minimum wage,” he added.

“The government can also set an audacious goal of building at least a few global consumer brands in sectors such as online businesses, travel and hospitality, rubber and palm oil, and possibly medical devices etc. in the next twenty years. This could be catalysed via highly targeted subsidies among other things,” Prashant said.

He said by providing various incentives focusing on the adoption of new consumer technologies, it can drive higher innovation and productivity and maintain the country’s economic momentum which bodes well for the advertising industry on the whole.

4As senior adviser and Oxygen Advertising managing director Datuk Johnny Mun said nothing significant had been allocated nor considered for the ad industry in the previous budgets.

Unfortunately, he said the government’s definition of “creative industry” is more skewed to film making and entertainment rather than advertising.

“If there is anything to wish for under Budget 2023, it is the minimisation of red tape at approval levels for productions like TV commercials etc.

“The ad industry is already self-policing, guided by a set of by-laws jointly thought of by industry experts and the relevant government authorities and this should be enough for all to work with.

“However, we can cut down ‘fats’ all round in the various relevant administrations. This ‘culling’ would save the government a huge amount of money and would benefit the economy and the ad industry as well,” Mun explained.