KUALA LUMPUR (Dec 29): Instead of imposing a goods and services tax (GST) rebate on mobile prepaid reloads for just one year, Putrajaya should resolve the problem once and for all by declaring the reloads a zero-rated item, PKR said today.

PKR strategy chief Sim Tze Tzin said the party opposed the rebate as it was just a temporary measure, done to pacify the people angered by the 6% GST imposed on mobile prepaid reloads.

He said the government will stop providing the rebate after a year, and that would leave the public back to square one.

"PKR rejects the new solution from the government. It is extremely unfair for the low-wage earners, pensioners and the youth, who had believed the government's promises. After a year, the 6% GST on mobile prepaid cards will return.

"PKR proposes that mobile prepaid cards be zero-rated. This will solve the problem and help the low-income earners.

"But the government has rejected the proposal because it needs the GST money," Sim said in a statement released today.

He said the telcos were also unwilling to foot the annual RM850 million in GST revenue Putrajaya earns from mobile prepaid reloads, even though it had willingly absorbed the now-abolished 6% sales and services tax.

Sim added that it was shameful for the government not to have come up with a permanent solution nine months after the GST was introduced.

He also took exception to the fact that the announcement on the rebates yesterday came from a "non-governmental organisation", saying this showed Putrajaya was too afraid to face up to the problem.

Yesterday, the Communications and Multimedia Consumer Forum of Malaysia (CFM) said the rebates will be offered until December 31, 2016, in line with Prime Minister Datuk Seri Najib Razak's announcement during the tabling of Budget 2016 on October 23.

Under Budget 2016, Najib announced that rebates for GST will be offered to prepaid mobile phone users and that the government was willing to "let go" of some earnings from the broad-based consumption tax to lighten the burden of consumers.

The rebate follows public outcry after mobile phone prepaid reloads were subjected to GST charges.

Then deputy finance minister Datuk Ahmad Maslan had said there would be no changes to the prices of reload coupons, as the 6% GST would merely replace the 6% sales and services tax.

The Malaysian Communications and Multimedia Commission and CFM later clarified that consumers would have to bear the GST cost on prepaid reloads as communication services were not exempted from the tax nor zero-rated.

In May, former communications and multimedia minister Datuk Seri Shabery Cheek said it was unfair to demand telcos absorb the GST on behalf of consumers, as it was a consumption tax.