CYBERJAYA, Oct 27 ― Putrajaya and telecommunications companies will jointly absorb the cost of Goods and Services Tax (GST) rebates for mobile prepaid top-ups starting next year, Datuk Seri Dr Salleh Said Keruak said today, adding that both parties are now working out a cost-sharing ratio.
He said the telcos have agreed in principle to the proposed rebate system and are now negotiating terms with the federal government ahead of the planned January 1, 2016 rollout.
Explaining the matter, the communications and multimedia minister said the rebate system does not mean that GST will not be collected from mobile prepaid purchases.
Salleh said the 6 per cent tax will continue to be collected in full by the Treasury and, depending on the agreement with telcos, whatever percentage the government is to absorb from the cost of rebates to consumers will come entirely from his ministry.
“[The money] is not from the Treasury. It is not from the GST that it is returned,” Salleh told reporters at the ministry’s office today.
“It is not from the treasury, but it is still from the government, we are [part of the] government also.”
He said Malaysian Communications and Multimedia Commission has its own funds from payments for licensing and Spectrum use.
Salleh added that based on discussions with the telcos thus far, there are no foreseen technical glitches ahead in the rollout for GST rebates, though they are still working out details to the system in differentiating between phone lines of foreigners and Malaysian citizens as only the latter will be entitled to these payments.
“We are also discussing the timeframe of the rebate is given to the user. We want everything to be built in to the system and automated so that everything is set and works properly,” he said.
He clarified that the rebate would be in the form of airtime and that the rebate system is currently only planned to be implemented for one year as announced during Budget 2016.
Whether the rebate system will continued beyond that will be decided in the future, he added.
He also said that currently, there are currently 33 million prepaid users in Malaysia making up close to 80 per cent of telco subscribers in the country.
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 6 per cent for prepaid cards, which is now replaced by the GST that is also at a rate of 6 per cent but passed on to consumers.
Prime Minister Datuk Seri Najib Razak had last Friday tabled Budget 2016 in his capacity as Finance Minister, announcing a rebate on mobile phone prepaid airtime starting January 1 until December 31, 2016.
