Shabery: Top-up cards mostly used by foreigners

RM10.60 for RM10 or RM10 for RM9.43 talk time? Government to carry out survey.

KUALA LUMPUR: The new GST spokesman, communications minister Ahmad Shabery Cheek, says the federal government will forego RM800 million a year in revenue if the Goods and Services Tax is not imposed on prepaid mobile phone top-up cards.

Shabery Cheek said as many as two-thirds of the prepaid phone users are foreigners, mostly those from Myanmar, Indonesia and Bangladesh, according to Utusan Malaysia.

“If you ask me, I don’t want our money to be paid to subsidise their prepaid cards,” he was quoted as saying yesterday, Malay Mail Online reported.

He said the government would conduct customer surveys to find out if they preferred to pay RM10.60 for RM10 in air time, or RM10 for RM9.43 talk time.

Shabery was told to take over as GST spokesman yesterday by prime minister Najib Razak, after a month of controversy and criticism of deputy finance miniter Ahmad Maslan, who has been the government’s point man on GST.

Ahmad Maslan had announced that action would be taken against telecommunications companies if they passed on GST on top-up cards.

In the past sales and service tax of six per cent for prepaid cards had been absorbed by the phone companies. With GST the 6% tax is passed on to consumers.

On Friday, Shabery confirmed that GST would be imposed as prepaid cards are not classified as zero-rated or tax-exempt.

He said the surveys are expected to be completed this week and tabled at the next Cabinet meeting.