It’s RM10 for RM10 cards from next year but tax to include messages and data

PUTRAJAYA: Prepaid mobile users will get air time of RM10 for every RM10 top-up, but they will have to pay Goods and Services Tax (GST) for calls, text messages and data usage.

This will be implemented from 2016 to give telcos time to prepare ahead.

The current RM10.60 charge (inclusive of 6% GST) for a RM10 top-up will stay until the end of the year.

Communication and Multimedia Minister Datuk Seri Ahmad Shabery Chik, who disclosed this at a press conference yesterday, said the Government decided that the new method of incorporating GST on prepaid usage was suitable and fair.

“The GST is collected only when consumers use the service and not before.

“This, however, could not be done now because the GST-included prepaid cards are still in the market,” he said.

Ahmad Shabery said the decision had been conveyed to telco operators, who said they needed about six months to reconfigure their systems and produce new cards.

The re-configuration, he added, was a difficult process which involved many distribution strata and agents as well as various inputs for the prepaid top-up values such as the physical card, online added value, the Internet and mobile banking, and the automated teller machine.

“To balance the effects of the GST, the Government has asked the telco operators to reduce the rates of their services and offer more affordable packages to targeted groups such as students,” he said.

Prepaid mobile phone users are not particularly thrilled with the decision.

Undergraduate Annie Grace Pravena Peter, 19, said:

“At first they wanted us to pay RM10.60. Now, it’s GST for every call.

“It is the same thing. Either way, we will have to fork out more.”

Annie hoped the Government would consider that students were the majority of those using prepaid cards and they were living on a tight budget.

“I top up RM50 a month and every ringgit counts,” she said while suggesting rebates be offered to students.

Wong Khai Wern, 22, a second-year undergraduate at Universiti Malaya, said the change would placate users because “they won’t be conscious of how it (GST) is being charged”.

Nurse S. Santhakumari, 58, was, however, indifferent to the change.

“Either way, I am paying the GST,” she said.

Federation of Malaysian Consumer Associations (Fomca) secretary-general Datuk Paul Selvaraj approved the Cabinet’s decision of not imposing the GST on reloading.

When asked how the change would affect consumers, Paul said it would depend on users’ call consumption.

“They will have to manage their calls to optimise cost,” he added.