Lim Guan Eng: RM10 prepaid top up should give you RM10 of credit

Posted:  September 2, 2018   By:    41 comments   


Malaysia 6% SST Prepaid Reload

UPDATE: Prepaid services are officially exempted from SST beginning 6 September 2018. More details here.

Starting 1 September 2018, all telcos had introduced 6% SST on all services. This is done in accordance with the Sales & Services Tax Act 2018 and it covers all users including postpaid, prepaid and broadband. For postpaid, the 6% tax is applied on the total taxable amount while prepaid users will have to pay the 6% tax at the point of top up.

Obviously, this had caused a lot of dissatisfaction for prepaid users as most of them are getting less value when they reload. For example, a RM10 top up will only come with RM9.43 of credit after deducting the 6% tax.

The Malaysian Minister of Finance, Lim Guan Eng, had responded that prepaid top ups should come with full value after topping up. If you top up RM10, you should get RM10 of credit. He added that the 6% SST should not be passed on to customers. As reported by NST and Astro Awani, he said that users getting RM9.43 instead of RM10 is a technical issue which needs to be ironed out.

Meanwhile, Minister of Communications and Multimedia, Gobind Singh, had tweeted that his ministry is aware of the SST issue on prepaid reloads and they will be issuing a statement soon. At the time of posting, all prepaid reloads are still charged at 6% SST and telcos have tried to cushion the blow by offering extra freebies in the form of free minutes and free data. You can check out the full list here.

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If the government wants to ensure that a RM10 top up remains RM10 in value, one possibility is to exempt prepaid from SST which currently isn’t. This is similar to the previous administration’s move to exempt prepaid from GST effective 1st January 2016. According to the Royal Malaysian Customs Department, prepaid service is still subjected to SST. You can refer to their telecommunications guide on Page 5.

However, if the government is still insisting on taxing prepaid users, another alternative is to tax based on usage. This means you’ll get full value upon top up but you’ll be taxed only when you make a call, send an SMS or subscribe to a data plan.

Of course, there’s the last option of forcing telcos to absorb the 6% service tax for prepaid. If you’re wondering why this wasn’t an issue before GST, it is because our telcos have been absorbing the 6% tax all these while. The telcos had tried to impose the 6% tax on starter packs and reloads but the move was deferred after negotiations with the government. According to a report by TheStar from 2011, the telcos have paid a total of RM6 billion in service tax since 1998.

As mentioned by Lim Guan Eng, the list of items affected by SST will be reviewed taking into consideration the views of the people. You can expect more changes to SST to be made by end of this year. He had given an example whereby prawns were currently covered under SST because it was lumped together with abalone.

SEE ALSO:  Mobile Prepaid services will be exempted from SST starting 6 September

For telcos, they are only complying with Sales & Services Tax Act 2018 and the government has to make the necessary amendments if they intend to exempt reloads from SST. What do you think is the best solution? Should the 6% tax imposed for postpaid customers only? Let us know in the comments below.

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41 Comments for Lim Guan Eng: RM10 prepaid top up should give you RM10 of credit

tapir

nasib baik aku haiwan

    Boleh news

    Malaysians love overhype fake news. But these kaki lepak and kaki judi bola dont make a fuss when mamak stalls taxed them without proper receipt.

Max

I’m confused about prepaid and postpaid.

Since postpaid customers are committing themselves for fixed monthly payment, aren’t they supposed to get extra stuffs. Maybe like tax exemption? While prepaid can choose not to to up for some time. And also can exit anytime.

    Raja Hafiz

    postpaid ni GUNA dulu baru bayar… so dari sudut Telco, rugi la sebab diorang kene provide servis dulu baru dapat bayaran.

    manakala prepaid ni kita BAYAR dulu dan x semestinya terus habis guna… dari sudut Telco, untungla sebab dapat duit dulu..

      Andrekua

      Tax memang semua kena bayar, tak kisah you bayar dulu atau kemudian. Bila guna terus bayar, satu standard. Kalau tak nak bayar, jangan guna.

        insaf

        kalo tak nak bayar SST, buatlah telco sendiri. xD sarcasm intended

      Kahkahkah

      Cukai masuk poket telco atau poket kerajaan? Guna otak sikit.

        Rambui

        At the end gomen is ttp a gomen
        Kerja depa pulun duit
        Byr elaun depa
        Bg kontrak to cronies
        Rakyat dikata pemalas
        Enjoy ur stay in Malaysia

Hippo

Wayang la. Suddenly LGE and GS become hero for the rakyat. Last last back to normal.

    halimi

    Check out my comment on the previous post on Prepaidcard 6% SST, Own production, own director, ownself be the actor & side kick, just to show government is caring & didn’t introduce draconian tax system, so all other 10% on electrical appliances, 5% on Headphone, 6% service charges is forgotten.

    Telco can always rise the price of call charges, it will back to square one, just like Honda can reduce the rebate & show car is cheaper under SST, end of the day Rakyat still kena kencing by PH.

    Emma

    Mana ada wayang. Before gst mmg sudah ada sst. Skg dia impose balik aje. No wayang. At least niw hanya kedai makan yg sales RM1.5m annually aje charge sst. Dulu yearlys RM500k. So sendiri fikur la

      halimi

      You think we memory lapse just because it’s 2015 ? previous SST where did prepaid reload need to pay tax ?

      Restaurant below 500K revenue still need to buy stuff & equipment which requires to pay SST as much as 10%, wouldn’t that eventually charged to customer as well ? there may not charged 6% SST but will rise the price.

      Hand phone doesn’t have SST previously now it has 5% SST.

      This SST 2.0 cover much more item than SST 1.0, most of all SST are not refundable, it will indirectly pass to end consumer.

        Bax

        Don’t be lazy. Read the article until finish la. Prepaid was taxed even during sst 1.0. It’s just the telco absorbed all taxes

          halimi

          Wrong ! SST 1.0 didn’t tax prepaid reload, Is GST that been absorb.

          I repeat during SST 1.0 it was never been imposed on Prepaid reload.

          Please check you fact boy, i been using Prepaid since early 2000, those day a Maxis prepaid sim cost more than RM 100, i bet you still studying kindergarten & playing with water bottle phone…lol

          soyacincau

          As mentioned in the post, there’s always service tax for prepaid. The reason why you’re not seeing it is because telcos have been absorbing it since 1998. In 2011, the telcos plan to start imposing the 6% tax on starter packs and reloads but eventually they agreed to defer and continue paying this amount. This was before GST was introduced in 2015.

Hang Jebat

Aku rela bayar rm 10.60 untuk dptkn rm 10 kredit mcm gst awal ii dlu.Klau sst plak dh la byr rm 10 tpi benci sbb kredit x cecah rm 10 and nk bli data plak kne genap rm 10

Andrekua

Just pay la… why double standard?

Smartphone few hundreds to thousands can afford, but 6% cannot afford.

    Normal Guy

    Most sensible comment I’ve seen in a long time. My thoughts exactly.

    halimi

    Did you said the same during BN GST time ?

    Rambui

    Dulu kerja dgn btn ka…ur wordings so exactly the same as one guy from btn last time…

    Daniel

    So, that’s your assumption? Genius….

    dlhn

    People need to buy data RM10 . We top up rm10 but only get rm9 . So people need top up rm5 more to buy data . Its realy troublesome to some people

      Sam

      This is right. You nail it! Like when you want to buy plan which costs RM10 but you can’t buy the plan because when you topup RM10 you are getting less than that. So you need to buy additional RM5 topup so that you can buy the plan. And again, you buy RM5 but you are getting less than that.

      Some people just say, just buy lah. Why so stingy. Mind you, not everyone is a crony like Vincent Tan or Naza.

      Thank you.

    sid

    why didnt i see this last time was GST was imposed ?

    oh because u just double standard yourself.

BeSmart

More concern on the 6% charged from restaurants. Some of them had raised their price even higher than previous price (including GST at that time). Anyone know where i can report them?

    halimi

    Try Pinhorn Road Bungalow in Penang, remember that lower than market price Bungalow due to no swimming pool & bad fengshui.

      supercow

      Wow.. we have a troll hating PH

        Rambui

        No hate2 one…juz applying the same standard dat ph applied dulu
        Ppl expect diif form of govt not another clone neither clown
        As sum1 above said…no double standard

BLAH BLAH

cerita yang sama macam masa gst dulu.

Zack kecewa

Akhirnya to lma lagi rakyat akan mengemis juga dibandar siap sedia lar tukar pon sama juga to tahu berapa yg blh tahan atu kés bunuh diri meningkat pada tahun akan dtg hbis lar dpt gaji bayar semua keperluaan hidup ank2 lgi semua Naik gji mcm tu je tk berubah akhirnya nyawa yg tinggal hutang bertambah pjm dgn along bertambah negara kte akn jdi mcm India 5 tahun akn dtg bilagaan tinggal dahan je sebab pokok DH mati 2020 semua settle yg tinggal kenangaan pahit dn manis pe nk buat DH hasib badan labu 5*2,,2*5

merdekaGoblok

i dont mind if paying tax to current gov as long as management transparency are being carry out compared to previous one masok self pocket and cronies.

    sid

    this one sure transparent la. where got cronies. petron deal with gov pun bukan cronies what. all clean …

    .. and BS. but clean.

    Miko

    Try and google “senarai kroni mahathir”. Latest, his sons got project bro! Approved!

Alexiers

Shouldn't they thought of this upfront? Did not one soul in the ministry thought that this would cause an uproar amongst citizens?

GrandmaLu

“He added that the 6% SST should not be passed on to customers”

Can you quote what he really said. The purpose of sales tax is literally to tax sales, which means it have a direct impact to the pricing, which will end up being paid by the consumer. Saying that it shouldn’t be passed down to customers is plain stupid and lack the understanding of the taxation system altogether.

    Popular Book Store

    Populist talk. Say what people want to hear but don’t do actual job. LGE should talk less and pls take action. Has Gobind respond? Is it very hard for LGE to meet with kastam and gobind to settle SST?

Andrekua

Ooh well, you can still see how reliant people are on the government.

It is actually very easy to see, government only get 6% while 94% still goes to service provider. If you feel pain about the 6%, why you don’t feel pain about the 94%?

Moreover these damn celaka telcos keep raising pricing via smart marketing. Old plan die die dun want revise term, while new one increase a bit but double the data. Once the data reach certain point, most likely won’t ever finish but you still pay the higher price because you’ll made to feel like idiot if you don’t upgrade for few bucks more. This cycle continue several times and now we reached where we are. The average price per costumer is rising every year and it shows on the telcos financial. Maxis FY17 2.1b net profit and Digi 1.4b but we still focus on the 6%.

Can’t we focus on bigger picture? It’s time to invite big foreign players into our market. Please……

    David2

    What I saw just a blindly support of PH…

    LGY said is telco issue, who make the new SST law and regulation?
    We paid for what we got, no body force you to use any kind of services…
    Just the bull shit PH still thinking a way to blame other while no asking why they didn't plan earlier…

    Oh… All blame to ex-government done!

    David2

    What I saw just a blindly support of PH…

    guest

    Wow… invite big foreign player…

Vici

LGE’s nickname is Nobita because he looks like Nobita.