Now minister proposes GST exemption for mobile prepaid reloads

Last Friday, the communication and multimedia minister said Putrajaya would lose RM800 million in tax revenue yearly if prepaid reloads were exempted from the GST. — File pic
Last Friday, the communication and multimedia minister said Putrajaya would lose RM800 million in tax revenue yearly if prepaid reloads were exempted from the GST. — File pic

KUALA LUMPUR, May 4 — Datuk Seri Ahmad Shabery Cheek has proposed that prepaid mobile reloads be exempted from the Goods and Services Tax (GST), as the Multimedia and Communications Minister believes that is the solution many Malaysians wanted.

“Because this is what Malaysians want, I will follow. That means if you purchase RM10, you get RM10 worth of airtime. I believe this can happen, it is not impossible,” he said during a live interview on national broadcaster TV1.

“I will call the CEOs from telcos, we will find a mechanism so what when people buy RM10, they get RM10.

“We must give the people what they want,” the minister stressed.

He said he will also inform the Cabinet and explain the rationale of his solution to the prepaid reload issue.

But Ahmad Shabery did not state who would absorb the GST costs for the prepaid reloads.

Last Friday, the communication and multimedia minister said Putrajaya would lose RM800 million in tax revenue yearly if prepaid reloads were exempted from the GST, adding that he did not want this to happen as most prepaid users were foreigners.

The pricing of prepaid reloads was among the most visible signs of confusion following the implementation of the GST, after telecommunication companies raised prices to incorporate the tax, despite public directives from Deputy Finance Minister Datuk Ahmad Maslan not to do so.

The Customs Department on April 29 told telecommunication companies 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 (MCMC) said prepaid reload coupons will still be sold with GST added to the price, meaning Malaysians will buy a top-up coupon valued at an airtime credit of RM10 for RM10.60.

This finally prompted Prime Minister Datuk Seri Najib Razak to tell Ahmad Shabery to “take charge” of the issue. He also enforced a gag on non-ministers making statements on the matter over the weekend.

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