Outcry over service tax on prepaid reloads, starter packs

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Dayang Halimah Salam

Mohd Fuzi

Mohd Fazillah Rosli

Hafiz Saimi

MIRI: Moans and groans greeted the news that a 6 per cent service tax would be imposed on all telcos prepaid reloads and starter packs, effective Sept 15 this year.

A random street poll in town showed that the people here have given the thumbs down to the extra charge for prepaid mobile reload.

Dayang Halimah Salam, 35, said more would have to be spent to top-up her mobile phone.

“With the service charge at 6 per cent, a RM10 reload will now cost RM10.60 while RM15 prepaid reload cost RM15.90 and RM30 reload, RM31.80. This will burden us low income earners,” she moaned.

She said nowadays, the mobile phone is an important device for connecting with people and a part of living. Not having a mobile phone is no longer an option.

Private company employee Hafiz Saimi, 25, said the 6 per cent service tax on prepaid reloads at the point of sale was inconvenient as they might be expected to come with coins such as 60 sen to buy a RM10 top-up.

“Previously, we purchased the prepaid reload at a rounded figure for example RM10 notes, RM15 and RM30 but with the service charge, coins will be needed,” he added.

Mohd Fazillah Rosli, 23, predicted that the new charges would induce more prepaid users to shift to postpaid.

Regardless of channel, all telco starter packs and reloads would be charged service tax at the point of sales from Sept 15 nationwide, except tax free havens such as the islands of Labuan, Langkawi and Tioman.

Mohd Fuzi, 20, a tertiary education student said he was worried about the extra spending on his monthly mobile reload.

“My monthly mobile phone usage is already a struggle for a student like me, what more with the additional 6 per cent service charge,” he groaned.

From Jan 1 this year, service tax is 6 per cent from the previous 5 per cent, but the telcos had been absorbing the service tax since the introduction of prepaid services in 1998.

From Sept 15 this year, reloads via Automatic Teller Machines (ATM), Cash Deposit Machines, Internet Banking and Electronic Payment Kiosks will not be available until further notice.