Despite announcing just a week ago that consumers need to get exactly as much mobile credit as they pay for, Communications and Multimedia Minister Ahmad Shabery Cheek now says it would be unfair for telecommunications companies to absorb the cost of Goods and Sales Tax (GST) for those prepaid top-ups.
In Parliament today, Shabery warned that forcing telcos to absorb the cost of GST would send the wrong message to local and foreign investors, who might worry that they would all have to absorb the GST into their costs the same way they previously did with the phased out Sales and Services Tax (SST).
“Once GST implementation is stabilised, will it become our practice to send a signal to the international trade community that they have to absorb GST cost when trading or investing in Malaysia?
“That is not the signal we want to send to them, nor to the industries in the country,” The Star Online‘s Loshana K Shagar quoted him sayin in reply to a query from Titiwangsa MP Johari Abdul Ghani of UMNO.
Shabery added that consumers should not expect for GST costs to be borne by telcos indefinitely, even if those telcos agree to absorb it in the frst few months of the new tax’s implementation.
The GST, which adds a 6% charge, came into effect on April 1.
On the subject of how a RM10 mobile top-up would get consumers RM10 worth of credit and still include the GST without telcos absorbing it, Shabery said the Federal Government was mulling a few approaches to resolve the issue.
“One of the methods we are looking into is for a consumer not to be charged GST when the prepaid card is activated, but for the charges to kick in only when they actually use the services.
“The ministry is also urging telcos to reduce their tariffs to offer a talk-time value equal to, or higher than, the cost of the prepaid reload card.”
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