The Minister of Communications and Multimedia, Datuk Seri Ahmad Shabery Cheek tried to defend the 6% hike in prepaid mobile services as a result of the GST implementation. He pointed out that Putrajaya stands to lose RM800 million in tax revenue annually if it does not collect the Goods and Services Tax (GST) on prepaid reloads, Communication and Multimedia Minister Datuk Seri Ahmad Shabery Cheek has said.
He told Utusan Malaysia that Putrajaya stands to lose RM800 million in tax revenue annually if it does not collect the Goods and Services Tax (GST) on prepaid reloads.
Ahmad Shabery was be disingenuous because the controversy was never about GST being imposed on prepaid mobile services. No one is asking for the prepaid mobile services to be zero-rated.
The issue is the telecommunication companies taking advantage of the implementation of GST to raise prices by 6%. The Prime Minister, Datuk Seri Najib Razak himself has condemned such price hikes and demanded that the authorities “come down hard on the profiteers and unscrupulous traders who manipulated the GST for their own extra financial gains”.
Why is it then that these mobile telcos are allowed to raise prices?
Under the previous regime, consumers paid RM9.43 to receive RM10 worth of mobile services value. Today, without taking into consideration the taxes, the consumers are forced to pay RM10 to receive RM10 worth of mobile services value. Hence the price hike has nothing to do with the replacement of the 6% sales and services tax (SST) by the new 6% GST.
It is unfortunate that the Malaysian Communication and Multimedia Commission (MCMC) which is supposed to act as the regulator to protect the interest of consumers and ensure competitive practices by the telcos is instead defending the profiteering activities by these companies.
The Minister is now offering the following options to be considered by the Cabinet. He proposed that either a prepaid card sold at RM10.60 for an airtime value of RM10, or a GST-inclusive rate of RM10 for an airtime value of RM9.43. Hence in the future, instead of paying RM9.43 to receive RM10 in value, consumers will have to pay RM10 to receive only RM9.43 of value.
This wasn’t the first time the telcos attempted to raise their prices of prepaid mobile services. In September 2011, the mobile operators colluded to increase their prices by passing on the SST to consumers. The move was subsequently withdrawn after objections from the public as the move was anti-competitive.
The current price hike exercise is no different, except that the GST is being used and abused as a ruse.
Therefore, the Prime Minister must stop the unfair duplicity in the Government’s policies which favours the large corporations. In 2014, Maxis Communications, Digi Telecommunications and Celcom Axiata made pre-tax profits of RM2.44 billion, RM2.65 billion and RM3.1 billion respectively. In total, they collected RM12.8 billion in prepaid mobile services revenue for the year.
Ahmad Shabery must take cognizance that the same Anti-Profiteering Act must be imposed equally and fairly on petty traders deemed unscrupulous for raising prices post-GST, as it must be imposed on the unscrupulous telecommunication companies which trampled on the Act despite making billions of ringgit in profits.