Zero-rate prepaid mobile phone reloads, PKR tells Putrajaya

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(May 4): PKR today suggested Putrajaya to list prepaid mobile phone reloads as zero-rated or exempted items from the goods and services tax (GST) to address the current confusion.

Pandan MP Rafizi Ramli said this was the simplest, most direct solution to solve the problem, without disturbing levels or chains involved in the sales transaction.

"Instead of the complicated procedures, the telecommunications companies need only key in zero instead of 6%, for the tax fee in their system," he told reporters in Permatang Pauh today.

Rafizi also suggested a “windfall tax”, to be charged to the telecommunications companies, that monopolised the industry with only four major players, and earned over 40% to 50% in their margin of nett profits.

He said Putrajaya should claim the the projected loss in annual revenue, estimated at over RM800 million, from the telecommunications companies and other similar profit-making entities.

Communications and Multimedia Minister Datuk Seri Ahmad Shabery Cheek reportedly said scrapping the consumption tax off mobile top up cards, would result in losses for Putrajaya.

Shabery attributed the potential loss to foreigners, the majority from Myanmar, Indonesia and Bangladesh, whom he said, made up two-thirds of the prepaid service users.

Rafizi rubbished the claim, said many students, workers and low-income groups in general, were the ones using the prepaid mobile service.

"Only those in high-income groups and ministers, who used postpaid," said Rafizi, adding that he could not fathom how the government failed to see the straightforward solution that removed the burden from consumers in the first place.

"I don't know whether they are hiding because they don't want to do declare mobile top-ups as zero-rated or exempted items, or that this is sheer incompetence.

"Charge the telcos and not the people.

"All it takes is a stroke of a pen and one instruction," he said.