Home / Industry / 6% service tax on prepaid reloads and starter packs starting Sept 15

6% service tax on prepaid reloads and starter packs starting Sept 15

As reported before on Malaysian Wireless, the mobile operators(Maxis, Celcom, DiGi, Tune Talk..etc) will start implementing the 6% service tax on prepaid reload/top ups starting 15 September 2011. The new move also applies on purchase of new prepaid starter packs as well.

The telcos said the service tax is a consumption tax and chargeable to the customer, as provided for in the service tax laws. A customer who purchases a RM10 prepaid reload will need to pay RM10.60, with the 60 sen being the service tax.

The Service Tax Act 1975 requires telecommunication companies to levy service tax at the prevailing rate on telecommunication services, including mobile prepaid services. This is similar to the service tax levied on food and beverage purchases from restaurants and hotels.

Official statement from the mobile operators to follow.

[Update1]- 8 telcos that will start charging the 6% prepaid tax, they are- Celcom, Maxis, DiGi, Tune Talk, XOX, Salamfone, Merchantrade & IMEtel.

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy