KUALA LUMPUR, Oct 20 ― PKR has lashed out at Putrajaya for what it described as the government’s failure to find a solution to the row over Goods and Services Tax (GST) charges on mobile prepaid use, citing unclear statements issued on the matter yesterday.
In a statement on his Facebook page today, PKR strategy director Sim Tze Tzin said the statements given by Communications and Multimedia Minister Datuk Seri Salleh Said Keruak and Deputy Finance Minister Datuk Johari Abdul Ghani raised more questions than answers.
“Since April until now, seven months have passed, three ministers responsible for this have come and gone, but an explanation for the problem has yet to be found. This proves the failure of the Umno/BN government,” he said.
“The public’s confidence in the government’s promises has been affected because of the many announcements made but still, the public is having to pay GST,” he added.
Salleh had told the Malay Mail Online late yesterday that his ministry had already engaged with the country’s telecommunications operators and have “reached several agreements in principle”.
When asked for more details including the date of the meetings and whether the telcos were aware of the expected return to pre-GST prices for prepaid cards, Salleh declined to comment further.
He similarly did not disclose what his ministry and the telcos had agreed on, saying; “Let us wait for PM / MOF’s decision,” in reference to the Ministry of Finance.
Johari, however, had told journalists when met in Parliament earlier in the day that the federal government is set on only allowing telcos to charge GST on usage and not at the point of purchase.
Responding, Sim said today that PKR has little faith in Putrajaya’s explanations and instead suggested that mobile prepaid reloads be a GST zero-rated item.
“PKR has suggested a formula to make prepaid cards zero-rated. This in turn will solve the problem and help the low-income group,” he said.
The Bayan Baru MP pointed out, however, that the government would be hard pressed to take up PKR’s suggestion as it would be passing up on some RM850 million in earnings.
On May 2, then Communications and Multimedia Minister Datuk Seri Ahmad Shabery Cheek had said that Putrajaya stands to lose RM800 million in annual tax revenue if it does not collect GST on prepaid reloads, owing to the high proportion of foreigners among prepaid phone users.
Shabery had confirmed on April 30 that GST will be imposed on prepaid coupons as they are not classified as a zero-rated item or a tax-exempt item.
There was a public backlash on the very first day of GST implementation on April 1, with complaints of higher cost of reload coupons as customers were asked to pay for GST on top of the airtime, despite an earlier assurance by then deputy Finance Minister Datuk Ahmad Maslan that there would be no price increases for prepaid users.
Telcos had in the past absorbed the now-abolished sales and service tax of six per cent for prepaid cards, which is now replaced by the GST that is also at a rate of six per cent but passed on to consumers.
