Pua: Telcos’ tax is illegal

Dcision to charge the 6% service tax is akin to price fixing and is against the soon to be implemented Competition Act 2010, says PJ Utara MP.

PETALING JAYA: Petaling Jaya Utara MP Tony Pua criticised the decision by telecommunication companies to charge the 6% service tax as illegal because the companies were trying to fix prices.

“There is no question that the joint statement (on the decision) and attempt by the four telecommunication companies to raise prices by the same percentage concurrently is illegal because they are colluding to form a cartel for the purposes of price-fixing.

“The real issue at hand is the blatant and coordinated attempt by the telecommunication companies to raise prices concurrently, contemptuous of the competitive spirit,” said Pua.

On Thursday, all the telecomunication companies – Maxis, Digi, Celcom and Unifi – announced in a joint statement that purchases of prepaid reloads and prepaid starterpacks for all telcos will be charged a 6% service tax, effective Sept 15.

Bernaman had reported that the move was taken to ensure mobile prepaid services remain competitive compared to the postpaid, given the high prepaid rates for calls and SMS from the onset.

The move, however, did no go down well with politicians from both sides of the divide and the public, and led to a decision to delay taxation to next year.

Yesterday, all telecommunication companies suspended service tax on their pre-paid SIM card packs and reload pending discussions with the Malaysian Communications and Multimedia Commission (MCMC).

‘New law must have bite’

Information, Communications and Culture Minister Rais Yatim said the MCMC would review and determine the best time to implement the tax.

Pua also said that the move to impose taxes is against the Competition Act 2010 which is aimed at promoting competition. It would come into effect in February next year.

“The Competition Act 2010 states that, “the object of the Act is to promote economic development by protecting the process of competition, and thereby the interest of consumers”.

“The bill specifically bans anti-competitive agreements including price fixing, import cartel, bid rigging, territorial allocation, limiting production, market sharing.

“The anti-competitive agreements will be subject to financial penalties of up to 10% of the worldwide turnover of the enterprise over the period during which the infringement occurred,” said Pua who is also DAP’s national publicity secretary.

Pua urged the government, especially the Domestic Trade and Consumer Affairs Ministry to issue a stern warning to the telecommunication companies that their anti-competitive behaviour will not be tolerated.

“The government must act to prove that the Competition Act will protect ordinary consumers and not be trampled upon at will by Malaysian corporate giants,” said Pua.