KUALA LUMPUR: A 6% service tax will be charged for all purchases of prepaid reloads and prepaid starter/SIM packs for all telcos from Sept 15.
The telcos said on Thursday, Sept 8 that 6% service tax on prepaid services means a customer who purchases a RM10 prepaid reload will need to pay RM10.60. The 60 sen is the service tax.
“Whilst service tax on prepaid is not a new tax, the telcos have been absorbing the tax on mobile prepaid services since its introduction in 1998.
“The move taken was to ensure mobile prepaid services remain competitive compared to postpaid given the high prepaid rates for calls and SMS at its onset. With prepaid rates progressively reduced over the years, it is currently offered at very competitive rates,” they said in a joint statement.
The telcos said service tax is a consumption tax and chargeable to the customer, as provided for in the service tax laws.
The Service Tax Act 1975 requires telecommunication companies to levy service tax at the prevailing rate on telecommunication services, including mobile prepaid services. This is similar to the service tax levied on food and beverage purchases from restaurants and hotels.
Written by Joseph Chin of theedgemalaysia.com
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