Prepaid reloads will continue to be sold with the additional 6% Government Service Tax (GST) despite the Customs Department have said today that it could revert to pre-GST pricing starting May 2015.
Since April 1st, the Telcos (Maxis, Celcom Axiata, Digi, U Mobile, Tune Talk, Altel & others) have started imposing a 6% GST on top of prepaid reloads. The Malaysian Communications and Multimedia Commission (MCMC) later said that a survey will be conducted by the Telcos to assess if customers prefer lower reload values on which GST will be charged.
The results of the survey will help the Telcos and Government to decide the implementation of the 6% Prepaid GST. For example, a RM10.00 reload could cost RM10.60 (RM10 reload plus 6% GST added) or instead of paying for the reload with GST, customers would pay RM10.00 and GST will be deducted after reload (RM9.43 reload plus 6% GST added).
Below is the full media statement from the MCMC.
MCMC CLARIFIES POSITION ON GST FOR PREPAID RELOADS
Prepaid reloads will continue to be sold with the GST added to the reload amount. For example, a RM10.00 reload would cost RM10.60 with 6% GST added, clarified the Chairman of MCMC, Dato’ Sri Dr Halim Shafie.
“As we stated on 3 April 2015, a survey will be conducted by the communications providers to assess if customers prefer lower reload values on which GST will be charged. For example, a RM10.00 reload could be RM10.60 (RM10 reload plus 6% GST added) or RM10.00 (RM9.43 reload plus 6% GST added),” said Dr Halim.
“I am pleased to inform that the survey is almost completed and the results will be presented to the relevant authorities next week. The Royal Customs and Excise Department was agreeable to this survey being carried out before any further decisions are made.”
“However, there has been some confusion in the market as to whether prepaid reloads will be back to pre-GST rates from May 1. Unfortunately, it will be almost impossible for the service providers to implement the required changes in the next two days. Secondly, the results of the survey are not yet available and it may be premature to make any decisions at this point in time.”
The difficulty in reverting back to the pre-GST arrangements are due to the complexities in reconfiguring the systems, not only on the part of the service providers but also on third party agents such as financial institutions, electronic payment providers, super markets, petrol stations and all other sales agents totaling approximately 30,000 parties.
The cost of doing this will be significant on the service providers as well as the third party agents. In addition, new stocks of prepaid cards need to be produced and distributed nationwide.
“These costs should also be given careful consideration in coming to a final decision,” said Dr Halim.
“As all the relevant parties had previously agreed to wait until the survey is completed, MCMC would urge that any further decision on this matter be made only after considering the survey results as well as technical and financial implications,” he concluded.
In the meantime, prepaid reloads will continue to be sold with the GST added to the reload amount. For example, a RM10.00 reload would cost RM10.60 with 6% GST added.