Photo: Dato’ Seri Ahmad Shabery bin Cheek, Malaysian Communications and Multimedia Minister.
Malaysian Ministry of Communications and Multimedia announced today that soon, mobile prepaid top-ups will no longer be charged with the 6% Goods and Services Tax (GST) during purchase. Instead, the tax will only be charged during usage of the prepaid service. Dato’ Seri Ahmad Shabery bin Cheek, the Communications and Multimedia Minister who spoke at a press conference held in Putrajaya earlier today, said that the Cabinet has agreed to this proposal made by the Ministry and expects all telephone companies to implement this taxation method within six months.
The announcement today was made in part to address the confusion that arose when Royal Customs and Excise Department Director-general Datuk Seri Khazali Ahmad announced last month that from May 1st, telcos were directed to revert prepaid reloads to pre-GST rates. Malaysian Communications and Multimedia Commission (MCMC) responded a few hours later that such undertaking is impossible due to the complexity in the reconfiguration of the systems, not to mention the cost, and the infeasibility of rolling back the GST charges that has only been implemented for less than a month at the time. MCMC Chairman Dato’ Sri Dr. Halim Shafie also said that they are conducting a survey to determine the preferred mechanics of levying the tax on top of the credits, and today’s announcement is likely the result of that survey.
Post-GST, prepaid reloads now cost an additional 6% during purchase. For a RM10 credit, you’ll pay RM10.60, which has proved to be slightly inconvenient for folks who prefer to pay a round figure for their reloads. There was a proposal to sell the reload cards at RM10, with a usable credit of RM9.43, but today’s announcement suggests a different implementation.
Ahmad Shabery said when the new GST imposition for prepaid reloads is done, a RM10 top-up will give you exactly RM10. The tax will only be charged during usage of the service. He said that this way, it is more reasonable and less confusing to the people. Though the exact mechanics have not been specified, it is likely that the tax will be charged alongside a text message and a voice call.
This will inadvertently increase the rate of each call/SMS, so the Ministry also urges telcos to reduce their tariffs for mobile prepaid plans. Ahmad Shabery also said that after all, the telecommunication industry as a commodity will only become more affordable as the time goes by. If the telcos reduce their rates to be more affordable, this will reduce the impact of GST, and in turn, the people will benefit from this.
The mobile prepaid market is a huge one in Malaysia, generating about RM15 billion a year; it is no wonder that there is so much fuss regarding GST in this space recently. No matter how we slice this, the Government is implementing GST on our prepaid reloads and will continue to do so. It is up to telcos now on how they want to reduce their rates to compensate the total amount we have to pay to use their services.
You can watch the speech by Ahmad Shabery which we have embedded below:
The post RM10 mobile prepaid reload will give you RM10, GST will only be charged during usage appeared first on TechAttack.my.