Mobile prepaid cards revert to old prices from May onwards

The decision was reached a meeting between the Finance Ministry and the Royal Malaysian Customs Department with four telecommunication companies Friday morning, following an uproar that the prepaid cards and reload are subjected to GST.

"The prepaid top-up was among the main issues brought up on the first two days of the GST implementation. On Thursday, the telcos, following discussions with the Customs Department, decided to charge RM10.60 (for prepaid card and reload of RM10) but added an air time bonus worth RM1.30.

"But following hue and cry from the people, I held another meeting with the telcos to revert the decision and maintain the charge at RM10," Ahmad told reporters after visiting Proton Holdings Bhd here Friday.

Hence, he said for a prepaid card and reload of RM10, for example, the users would get the equivalent value although the purchase is subjected to the GST.

"I had never said that the prepaid card is exempted from the GST. In fact, it was subjected to the sales tax and services tax (SST) before. So, with the GST implementation at six percent, the price should not change," he said.

For a new RM10 prepaid card, Ahmad said the value before the GST is RM9.43 while the GST is 57 sen, with the telcos adding a bonus air time to ensure that its value is equivalent to the purchase price.

The prepaid card and reload price will remain until next month as decided on Tuesday (a RM10 card is priced at RM10.60 and gets a bonus air time of RM1.30 for every purchase or reload), he said, adding that the decision was in line with the Cabinet's decision, but the telcos needed one month to switch back their system that had been harmonised to the GST.

Citing another case, Ahmad said the GST was not imposed on services rendered by government agencies, law enforcement agencies and statutory bodies except for trading carried out at car parks by municipalities.