Lim maintains no SST for prepaid, tells telcos not to 'make lives difficult'

Finance Minister Lim Guan Eng has reiterated that mobile prepaid reload cards are not subjected to the sales and service tax (SST), saying there was no need for telecommunication companies to "make lives difficult."

This came after consumers complained that credit value was being deducted when they topped up their mobile prepaid to account for the tax, which came into force yesterday.

During a briefing on the SST at Kota Kinabalu today, he said that his ministry will be meeting with telcos to sort the matter out.

"To all prepaid users, tell them (telcos) that what they have been saying (that prepaid cards are subjected to SST) is wrong.

"There is no need for double tax cuts. If you use prepaid, you pay RM10 and you get back RM10. There is no such thing as (SST) deductions.

"Why are they (telcos) going to make lives difficult? Do they have no other work to do? We are meeting the telco companies. This one is no problem. Prepaid cards are the same (no SST)," he said during the briefing.

The revised SST replaces the GST, which was implemented by the previous BN administration and repealed by the new government.

Earlier, Lim (photo) said Putrajaya was forced to rush out the new taxation system to meet the Sept 1 deadline in order to avoid a potential operating deficit of RM4 billion.

The finance minister also stated yesterday that the list of goods under the SST will bereviewed and amended by year-end upon studying consumer feedback. 

Lim had previously assured prepaid card buyers that they should receive the full amount when they reload their mobile prepaid, and that consumers would receive a rebate of the same value to make up for any amount taxed.

“The six percent service tax will be credited back, as it is set in the service tax system.

“There should not be technical problems, but if it happens, we will give a rebate to the buyer for the same value.

"So do not be taken in by parties who are instigating that an RM10 prepaid card is worth less than RM10. It is not true,” he had said. -Mkini