Prepaid mobile users to pay 6pc service tax Read more: Prepaid mobile users to pay 6pc service tax

KUALA LUMPUR: Come Sept 15, prepaid mobile users will need to pay a six per cent service tax whenever they buy a starter pack or reloads.
This means, a customer will need to pay RM10.60 for a RM10 prepaid reload.

"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," said mobile service providers in a joint statement yesterday.

Since the launch of mobile prepaid services in 1998, mobile operators have been absorbing the service tax.

According to mobile operators, the move was to ensure mobile prepaid services remained competitive compared with postpaid.

"With prepaid rates progressively reduced over the years, it is currently offered at very competitive rates," they said.

Telecommunications analysts view the news as "generally positive" for mobile operators, with DiGi.Com Bhd seen as the biggest beneficiary and Maxis Bhd benefiting the least.

As at June 30 this year, 83 per cent of DiGi's customer base comprised prepaid users. In contrast, about 75 per cent of Maxis' customers were prepaid users.

Today, prepaid users are spending about RM36 to RM51 a month.

Analysts believe the implementation of the service tax is unlikely to reduce prepaid users spending significantly.


Taken from New Straits Times Online