All telecommunication companies have suspended plans to implement a 6 percent service tax pending discussions with the Communications and Multimedia Commission (MCMC).
On Thursday, the companies said that purchases of prepaid reloads and prepaid starter/SIM packs would be charged a six percent service tax, effective Sept 15.
Prepaid customers have been informed through text messages about the move since.
On Thursday, the companies said that purchases of prepaid reloads and prepaid starter/SIM packs would be charged a six percent service tax, effective Sept 15.
Prepaid customers have been informed through text messages about the move since.
The telcos said the service tax is a consumption tax and chargeable to the customer, as provided for by 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.
Whilst service tax on prepaids is not new, the telcos have been absorbing it for mobile prepaid services since its introduction in 1998.
[More to follow]
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