Telcos agree to defer 6% service tax until further notice

KUALA LUMPUR: Telecommunication companies have agreed to defer the 6% service tax for prepaid users, which was to come into effect on Thursday.

The agreement was reached during a meeting with the four major telecommunication firms at Angkasapuri here, said Information, Communications and Culture Minister Datuk Seri Dr Rais Yatim.

“The meeting with the managements of Celcom, Maxis, DiGi and U Mobile was held in a cordial atmosphere.

“They responded positively to the ministry's advice, the views of the Government and the sentiments expressed by Prime Minister Datuk Seri Najib Tun Razak on the matter,” Dr Rais told reporters yesterday after the hour-long meeting.

The companies were represented by their chief executive officers Datuk Seri Shazalli Ramly (Celcom), Henrik Clausen (DiGi Group), Sandip Das (Maxis Group) and Dr Kaizad Heerjee (U Mobile).

The companies, which previously absorbed the 6% tax, had announced last week that it would be imposed on prepaid users whenever they bought a starter SIM pack or reloads.

Dr Rais said the deferment would enable the Malaysian Communications and Multimedia Commission (MCMC) to review the matter and determine the best time to implement both the tax and new rates.

He said the Cabinet would be updated on the meeting, add- ing that he hoped the issue would no longer be raised because the telcos had agreed to defer the tax.

Dr Rais said he would recommend to the Government to provide the telcos with some incentives.

“This is to show some appreciation towards the telcos' positive response. They have paid RM6bil in service tax since 1998.”