GST on pre-paid cards being reviewed

KUALA LUMPUR: The government did not overlook the confusion on the Goods and Services Tax (GST) charged on mobile pre-paid cards, which is now being reviewed by telecommunication companies, Deputy Finance Minister II Datuk Chua Tee Yong said.

Stressing that the government had anticipated new issues and problems to arise in the next few months due to GST implementation, he said it is normal in any country implementing GST for the first time.

"In any country with GST, there will be such problems and confusion arising in the first few months.

"But the fact is that the government is looking at measures to address the problems instead of saying there is no problem," Chua told reporters outside Dewan Negara today.

He added that this was the reason the six-month period is given for businesses to get adjusted with the implementation. Chua said telcos would require about a month to readjust on the matter.

It was reported that telcos may revert to prices of mobile pre-paid cards to those before the GST charges by next month.

Deputy Finance Minister Datuk Ahmad Maslan had reportedly chaired a meeting with the telco chiefs last week and had discussed reverting to the old prices for prepaid top-up cards.

The Customs Department will meet the telco chiefs again for further discussion on the matter this week.

Before GST implementation begun on April 1, the telcos had been absorbing the Sales and Services Tax (SST), which was also rated at 6%.

However, after April 1, telcos started charging GST on the reload card prices. After a meeting between government officials and telcos, it was decided that the companies would be allowed to temporarily impose the GST on top of the prices – with additional talk time for customers – until a solution was found.