GST: Prepaid reloads to cost more for now, MCMC clarifies

  • Pending survey results and further study, current rates still stand
  • For now, RM10 reload will cost RM10.60 with 6% GST added

GST: Prepaid reloads to cost more for now, MCMC clarifiesPREPAID reloads will continue to be sold with the GST (Goods and Services Tax) added to the reload amount, according to industry regulator the Malaysian Communications and Multimedia Commission (MCMC).
For example, a RM10 reload would cost RM10.60 with 6% GST added, it said in a statement. [RM1 = US$0.28]
“As we stated on April 3, 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 reload could be RM10.60 (RM10 reload plus 6% GST added) or RM10.00 (RM9.43 reload value plus 6% GST added),” said MCMC chairman Dr Halim Shafie (pic).
The survey is almost completed and the results will be presented to the relevant authorities next week, the MCMC said, adding that the Royal Customs and Excise Department was agreeable to the survey being carried out before any further decisions were 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,” said Halim.
“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,” he said.
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 service providers but also on third-party agents such as financial institutions, electronic payment providers, supermarkets, petrol stations and all other sales agents totalling approximately 30,000 parties, the MCMC said.
The cost of doing this will be significant to service providers as well as third party agents. In addition, new stocks of prepaid cards need to be produced and distributed nationwide, the MCMC said in its statement.
“These costs should also be given careful consideration in coming to a final decision,” said Halim.
“As all the relevant parties had previously agreed to wait until the survey is completed, the 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 added.
In the meantime, prepaid reloads will continue to be sold with the GST added to the reload amount, the MCMC noted. For example, a RM10 reload would cost RM10.60 with 6% GST added.
Related Stories:
GST to cause 30% plunge in ICT sales: Pikom
GST to boost Malaysia’s enterprise software market: IDC
GST fears stalling IT spend in Malaysia: Barracuda Networks
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