Mobile prepaid tax exemption hailed

Malaysians relieved to be able to get full credit value and save on data plans

PETALING JAYA: The decision to exempt the Service Tax on mobile prepaid top-ups has gotten the thumbs up.

As of June, there are about 44 million mobile subscribers in the country, of which 33 million are prepaid users.

A fresh graduate, who wanted to be known as Shekinah, said she would be able to save on her voice and data plan.

“I subscribe to a monthly RM30 plan, which is the exact value of the reload card.

“Under the Goods and Services Tax, I had to buy a RM50 reload value to get the RM30 subscription plan.

“The extra money paid was a waste because I couldn’t finish utilising the free calls included in the package,” she said.

Muhammad Firdaus Roslan, also a fresh graduate, echoed the view, saying he was grateful that the mobile phone reloads had been spared the Service Tax.

“This is a good way to reduce the burden on prepaid users,” he said.

Finance Minister Lim Guan Eng had ordered the exemption of all prepaid mobile reload cards from the 6% Service Tax.

He warned that action would be taken against telcos that did not implement his directive.

However, only Malaysians are entitled to the exemption.

The Finance Ministry, in a statement, said the exemption fell under Section 34 (3)(a) of the Service Tax Act 2018 and would begin today.

“Through this exemption, prepaid customers will receive the full credit value when they reload and will not be taxed,” it said.

Vivien Lian, 24, said most of those who subscribed to prepaid plans were students, retirees and blue collar workers.

Tan Kwang Shean, who is pursuing his postgraduate studies, said the lower income group would benefit most from the exemption.

“Most prepaid users live on a tight budget so they can check their phone bills,’’ he said.

A lab assistant, who wished to be known only as Martina, said: “I’m so happy that SST is not implemented on reload cards.

“With 60 sen or more saved (per reload), I can at least buy a piece of kuih,” said the 56-year-old.

Housewife Lilian Liew, 74, said the news was a boon to senior citizens like her, adding: “I am happy as it shows the government still cares.”

However, some foreigners using prepaid plans were unhappy.

For Ropiani from Indonesia, the move to impose SST on prepaid cards for foreigners “is unfair”.

“I feel that the Malaysian govern- ment should appreciate the contribution of foreign workers because we are here to make a living too.

“This may seem like a small issue, but it makes it harder for us to get by because many Indonesian workers are not paid a high salary.

“I think the government should be fair and exempt the tax for foreigners as well,” said the 45-yearold domestic worker.

Student Mohammad Toriqul, from Bangladesh, said he would have to reduce his calls back home as they would cost more.

“As a student, I am on a tight budget. Now I will have to reduce the number of minutes used to call home as I am not getting the full credit value,” he said.