Drop 6pc SST on prepaid cards now, Guan Eng tells telcos

Kenneth Tee
Finance Minister Lim Guan Eng said the list of consumer goods and services under the new sales and service tax (SST) introduced September clearly exempted prepaid card reloads. — Picture by Shafwan Zaidon

KUALA LUMPUR, Sept 4 ― Finance Minister Lim Guan Eng today warned the country’s telecommunications companies to immediately stop charging the 6 per cent service tax on prepaid card reloads or face ministerial intervention.

He said the list of consumer goods and services under the new sales and service tax (SST) introduced September clearly exempted prepaid card reloads.

“Make the necessary changes or the ministry will interfere and change it for you,” he said during a morning talk show on RTM.

Lim said the government wanted to provide a guarantee to mobile phone users that if they reload RM10, they should get RM10 of credit without any deduction.

“Honestly, I do not understand why these telcos are making things difficult for themselves and to the consumers by offering rebates after the deductions.

“Whether they have an existing system problem or whether some of them still have Barisan Nasional mentality, I have ordered them to make the changes,” he said.

Lim noted a number of consumers had complained of being charged the tax when purchasing the reload cards, which meant they received less value than paid for.

He said the government is committed to an approach that is friendly and gentle but will interfere if directives were disobeyed.

“These private companies think they can outsmart us, which is why we have to advise and negotiate with them,” he said.

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