‘Don’t charge SST for prepaids’

> Telcos instructed to take necessary measures immediately

PETALING JAYA: Telecommunications companies have been instructed to stop charging sales and service tax (SST) on prepaid reloads.

The Finance Ministry said the tax exemption on prepaid services was to address the issue of companies having difficulties in adjusting their systems in view of the SST implementation on Sept 1.

The ministry said prepaid telecommunications users would get a full credit value when they make reloads.

“A different method will be announced later for telecommunications companies so that the government does not lose out in an attempt to ensure customers get the full value of the amount paid (for their prepaid reloads).

“All telecommunications companies need to take the necessary measures immediately in abiding by the tax exemption directive,” it said in a statement yesterday.

The ministry said the tax exemption would take effect today and that it was based on Section 34(3)(a) of the Service Tax Act 2018.

Finance Minister Lim Guan Eng had on Sunday assured prepaid users that they would receive the full value paid and rubbished claims on social media that reloads were not exempted from SST.

His statement came following dissatisfaction among users who complained that they have been getting less value after reloading, with an RM10 top up only getting RM9.43 of credit after tax deduction.