Can you imagine, exactly one month after the official implementation of the Goods and Services Tax, the Prime Minister had to tweet “Shabery Cheek please take charge of the top-up issue. Starting now any announcement to the people can only be made by the KKMM minister” because the Government acted like a headless chicken flip-flopping like nobody’s business.
The uproar arose because in the past, the telecommunication companies had absorbed the 6% sales and services tax (SST) for prepaid mobile services sale to consumers. However, with the abolition of the SST and the imposition of the 6% GST, the telco companies took advantage of the situation to pass the “new” tax onto the customers, resulting in an immediate price hike of 6% to the consumers.
It is of course too much to expect the Najib administration to have resolved this issue before the GST is implemented. However, it is stupefying how this matter hasn’t been resolved after more than 30 days!
Deputy Finance Minister, Datuk Ahmad Maslan had threatened to take the telecommunication companies to court for raising the price of their prepaid services on 2nd April 2015. He tweeted “…harga tidak berubah. Jika mereka degil, akan dibawa ke mahkamah!”
After several conflicting announcements by the Customs and the Malaysia Communications and Multimedia Commission (MCMC), Datuk Ahmad Maslan then went on to announce that the prices of prepaid reload cards would revert to the pre-April prices on May 1. He said that the four telcos had agreed to revert to the old prices, but needed a month to correct the situation.
The Deputy Finance Minister once again tweeted “Keputusan kabinet minta tak naik harga walau ada GST. Sama dgn keputusan saya jumpa 4 CEO Telco smlm.”
However, the telco companies did not reinstate the pre-GST rates yesterday. Datuk Seri Shabery Cheek defended them, claiming that the price was quite impossible to implement due to the complexity of system reconfiguration. He said, “prepaid reloads also involve payments made through banks and electronic payment methods besides involving as many as 30,000 agents across the country… a change in software and systems needs to be done to ensure that it runs smoothly.”
It would appear that based on Dato’ Seri Najib’s tweet, Datuk Seri Shabery Cheek won the fight on behalf of the telco companies. This unfortunately, is a massive set back for the equitable implementation of the GST and ordinary Malaysians. The excuse that the software systems were difficult to recalibrate, requiring more than month to complete is nothing more than utter bunkum.
The cartel-like attempt by the telco companies to stop absorbing taxes, despite no changes at all to the actual tax rate, and to pass them onto consumers is nothing less than a profiteering exercise. 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 6% more at RM10 to receive RM10 worth of mobile services value.
Datuk Seri Najib Razak blamed the GST burden currently experienced by the people on profiteering activities. Yesterday, he called on the relevant authorities to come down hard on the profiteers and unscrupulous traders who manipulated the GST for their own extra financial gains.
The question must hence be asked, why is it that the authorities are only allowed to “come down hard” on ordinary traders, many of whom were forced to raised prices beyond the GST rate due to the substantial increase in cost of doing business to comply with the GST implementation? Why is it when it is the giant multi-billion ringgit telco companies which were blatantly raising prices and profiteering from the GST implementation treated with such kids gloves?
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.
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.