MP: Petty traders blamed but telcos allowed more profits

Pua says government endorsed "single biggest profiteering exercise" but criticised the small man

KUALA LUMPUR: The DAP’s Tony Pua has taken the Prime Minister to task for criticising petty traders who raised prices after the Goods and Services Tax came into force, and said Najib Razak was a hypocrite for allowing mobile phone companies to gain RM770mil in windfall profits.

He said three major phone companies, Maxis, Digi and Celcom, had RM12.8bn in revenue last year with pre-tax profits of RM2.4bn-RM3bn, not including the profits of virtual networks such as U-Mobile, Tune and XoX.

Pua, MP for Petaling Jaya Utara, accused the phone companies of anti-competitive behaviour by persuading the government to allow them to drop a previous tax subsidy and to now charge 6% GST on prepaid mobile phone cards.

Mobile phone companies had absorbed the Sales and Service Tax on reload cards, and customers received RM10 in talktime for RM10 paid. With GST, the companies no longer absorb the tax and customers have GST deducted from the RM10 paid, resulting in less talk time. The government has agreed to a new regime next year where RM10 cards will provide RM10 talk time, without GST being collected: the tax will only be imposed on the value of calls made.

Pua described the prepaid card scheme as “the single biggest profiteering exercise” by the phone companies and attacked Najib for being “a complete hypocrite” in criticising petty traders when his government had endorsed the phone companies’ actions. He also criticised the domestic trade ministry for reportedly punishing restaurants that had raised the price of roti canai by 30 sen.

Najib had said in Pekan on Saturday that “We have abolished SST of 10%, 5%, some people do not know about SST before, the problem (abolition) is it should have reduced prices but another 6% is added, this is the cause. If you want to be angry, get angry with the traders, they must be blamed because they do not have compassion to think about the people’s interest” in remarks quoted by Bernama.

However, Pua said the Najib government had betrayed the rakyat’s interest in favour of more profits for the phone companies.