It is now the 1st of April 2015, and the implementation of the Goods and Services Tax (GST) is already underway. Malaysia’s new tax system applies to many of the products and services in Malaysia, not excluding prepaid reload coupons.
The Communications and Multimedia Consumer Forum of Malaysia (CFM) has confirmed that the goods and services offered in the telecommunications industry will be subject to GST, in order to meet the Government’s requirement. It will be replacing both the Sales Tax and Service Tax, which has currently been abolished.
Prepaid products and services that are affected by GST includes SIM packs, starter packs, as well as reload coupons. For example, you will have to pay RM10.60 for a RM10 reload coupon. Not only that, banks like Public Bank and Maybank will also charge the 6% GST on prepaid reload coupons purchased online.
[UPDATE] It appears telcos should not be charging an additional 6% tariff on reload coupons. This is due to the fact that there already is an out-going service tax that is levied within the reload coupon’s value, which will be replaced by GST. Here’s the official statement from the Customs Chief Director, Dato’ Subromaniam A/L Tholasy:
— GST Malaysia Info (@gstmalaysiainfo) April 1, 2015
Prepaid reload coupons are subject to the 6% GST charge by the Government because it is a form of mobile communications service, which is also a standard rated item under the GST Act 2014. Seeing that mobile communication services are neither exempted from GST nor zero rated items, the telecommunications industry has no choice but to charge the 6% GST charges on top of these prices.
As it is still the first day of the implementation of GST, telco companies are still making changes to the prices of their products. Rest assured, GST is here to stay and the 6% charge will be imposed not only on prepaid reload coupons but on most of the telecommunication services available.
[UPDATE 2 @ 8:30pm] The Royal Malaysia Customs and the Domestic Trade, Consumerism and Cooperatives Ministry will investigate local telcos who have increased the prices of prepaid reload cards, as this is against the explicit instructions of the Customs Department over the prices of the product after GST. More on The Star’s report here.