KUALA LUMPUR, Oct 23 — Mobile phone prepaid users will receive a rebate for any Goods and Services Tax (GST) paid previously, the prime minister announced today while tabling Budget 2016.
Datuk Seri Najib Razak said that the government was willing to “let go” of some earnings from the broad-based consumption tax to lighten the burden on the public.
“Because of this, users in Malaysia will get back rebates along with the GST amount paid that will be credited to their prepaid mobile phone accounts. This starts 1 January 2016 until 31 December 2016,” he said at the Dewan Rakyat today while tabling the government budget.
Najib did not explain how the rebates were calculated or how they will be credited into the accounts of mobile prepaid users.
This comes after several ministers gave conflicting statements on how mobile prepaid users will be charged GST.
Communications and Multimedia Minister Datuk Seri Salleh Said Keruak had told the Malay Mail Online on Monday 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.
Deputy Finance Minister Datuk Johari Abdul Ghani, however, had told journalists when met in Parliament on Tuesday that the federal government was set on only allowing telcos to charge GST on usage and not at the point of purchase.
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 implementation of the GST 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.
