Confusion over prepaid reload rates

Confusion over prepaid reload rates
Datuk Seri Khazali Ahmad.

PETALING JAYA - The Customs Department and the Malaysian Communications and Multimedia Commission (MCMC) are at odds over reverting prepaid reloads to the rates before the Goods and Services Tax (GST) by May 1.

The confusion follows a directive issued by Customs director-general Datuk Seri Khazali Ahmad to telco companies yesterday morning, informing them to revert to the pre-GST rates by tomorrow.

However, in a statement the same day, MCMC chairman Datuk Seri Dr Halim Shafie described Khazali's announcement as "premature", pending the outcome of a study on the issue.

"The survey is almost completed and the results will be presented to the relevant authorities next week.

"The Customs Department was agreeable to this survey being carried out before any further decisions are made, so it may be premature to make any decisions at this point in time," said Dr Halim.

He noted that the survey was being conducted to assess if customers preferred lower reload values, on which GST will be charged.

"For example, a RM10 reload could be RM10.60 with GST included or the consumer can pay just RM10 which consists of a RM9.43 reload value plus 57 sen GST," he said.

Also, Dr Halim insisted that it was "almost impossible" for service providers to revert to the old pricing in two days because of complexities in reconfiguring the systems.

"Reconfiguring these systems is not only on the part of the service providers but also on about 30,000 third parties, like financial institutions, electronic payment providers, supermarkets, petrol stations and other sales agents.

"The cost of doing this will be significant to the service providers as well as the third parties.

"Also, new stocks of prepaid cards need to be produced and distributed nationwide," he said.

In spite of these objections, Khazali stood firm, insisting that the telcos must comply with the directive.

"I have already said that as of May 1 the telcos must revert their prices to the 'tax inclusive' system that was used before the (implementation of) GST," he said.

Before April 1, prepaid card users were paying a 6 per cent Sales and Services Tax (SST), which meant that a RM10 card, for example, contained a RM9.43 reload value.

But the telcos gave users additional talktime to make up for the 6 per cent SST, meaning the consumers got the full RM10 reload value.

After GST was implemented, consumers were required to pay RM10.60 (RM10 prepaid value plus 60 sen GST), causing an uproar among them, most of whom were youngsters.

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