Finance Minister maintains no SST on mobile prepaid

Syed Jaymal Zahiid
Putrajaya will meet officials from telecommunication companies tomorrow following public backlash over a six per cent SST imposed on prepaid services starting yesterday. — Picture by Choo Choy May

KUALA LUMPUR, Sept 2 — Mobile prepaid reload cards will not be taxed under the sales and service tax (SST), Finance Minister Lim Guan Eng maintained today.

There have been widespread complaints by prepaid mobile users on social media that telcos are still passing on the six per cent tax for credit top ups after the SST came into force yesterday.

“If you use prepaid, you pay 10 dollars (ringgit), you get back 10 dollars. No such thing as deduction. Why are they (telcos) going to make lives difficult?” Lim said during an SST briefing in Kota Kinabalu here today.

“We are meeting the telco companies. This one is no problem. Prepaid cards are the same (no SST).”

Putrajaya will meet officials from telecommunication companies tomorrow following public backlash over a six per cent SST imposed on prepaid services starting yesterday.

Domestic Trade Minister Datuk Saifuddin Nasution is expected to convey the government’s disapproval over the move as they felt that the companies should absorb the cost, according to government sources familiar with the matter.

“There is frustration because we expect the telcos to absorb the cost,” a Ministry of Finance source told Malay Mail.

“KKMM (Ministry of Communications and Multimedia) will meet with the telcos on Monday. After KKMM have met the telcos, then MoF will issue a statement followed by KKMM,” another source said.

Prepaid services were among over 5,000 items listed for exemption under the new tax regime, but prepaid mobile users complained that credit value was deducted to account for the SST when they bought top ups.

The issue prompted allegations that the new Pakatan Harapan government had reneged on its pledge to bring cost of living down even as they introduce the SST.

SST charges six per cent for selected services and five to ten per cent for product sales.

The public uproar mirrored that of the political firestorm set off by the extra charges accrued to consumers when the defeated Barisan Nasional administration rolled out the Goods and Services Tax in April 2015.

Like the GST, customers lashed out at the Pakatan Harapan administration for “lying”.

On social media, angry consumers made comparisons between SST and GST and said the new charges made no difference between the two tax systems.

“This is a blatant lie. You listed prepaid top ups as one of those exempted but here we are getting charged,” said one Facebook user.

“It just reeks of lies,” said another user.

“It goes to show this government wasn’t as truthful about SST.”

Related Articles Rakyat tidak undi PH jika tahu SST bertingkat, kata Ahmad Communications Ministry notes SST issue for prepaid reloads, says Gobind Ministry: Two premises in Pahang get notices for pricing issues on first day of SST