PERMATANG PAUH, May 4 — All the confusion over the implementation of the Goods and Services Tax (GST) for prepaid mobile reloads can be resolved by making it zero-rated, PKR’s Rafizi Ramli suggested today.

The PKR secretary-general said this is not just the simplest solution to the problem but one that would benefit all involved parties.

“All the government needs to do is to announce that the prepaid reload is zero-rated so that telecommunications companies (telcos) can enter 0 per cent in their system across the board from the telcos to banks to retailers so that consumers won’t be charged the 6 per cent GST,” he said in a press conference at Yayasan Aman today.

Explaining further, Rafizi said because this is a transactional tax, by making it zero-rated, the 6 per cent would not be imposed on reloads bought at all levels, whether in banks, shops or petrol stations.

As for Putrajaya’s concern over losing RM800 million in tax collection by making it zero-rated, Rafizi suggested a “windfall tax”.

The Pandan MP said  “windfall tax” can be imposed on monopoly companies with high net profits of between 40 to 50 per cent.

The government can announce that telcos have to pay a “windfall tax” that is included as part of the income tax so that consumers would not have to pay GST for reloads, he added.

“I don’t know why Putrajaya doesn’t want to exempt the GST and impose the windfall tax on the telcos instead or maybe it is just sheer incompetence,” Rafizi said.

Recently, Communication and Multimedia Minister Datuk Seri Ahmad Shabery Cheek said Putrajaya will lose RM800 million per year if the prepaid reloads were GST exempted.

He said he has to meet and discuss with the telcos, Customs Department and the domestic trade, cooperative and consumerism ministry to resolve this whole issue.

There was some confusion over the issue when Deputy Finance Minister Datuk Ahmad Maslan directed telcos not to raise prices.

The Customs Department, on April 29, told telcos to revert the prices for prepaid reload coupons to pre-GST levels by May 1, meaning that a RM10 top-up card would be sold at RM10 with airtime credit of RM9.43.

However, the Malaysian Communications and Multimedia Commission said prepaid reload coupons will still be sold with GST added on to the price, meaning top-up coupon valued at an airtime credit of RM10 will be sold at RM10.60.

This finally prompted Prime Minister Datuk Seri Najib Razak to tell Shabery to “take charge” of the issue and issued a gag on non-ministers making statements on the matter.