Rais failed at the 6% tax on pre-paid

The recent announcement on the 6% service tax would be imposed on consumers for pre-paid mobile phone packages and top-ups got a lot of negative attention from the public. The public outcry rippling across the nation and snowballing into seismic portions. In the times where consumer items which include food and utlity charges rising, the 60% odd market of the 34 million mobile phone users is about affcting the middle-to-lower income and masses.

Minister-in-charge of Communications, Information & Culture YB Dato' Seri Utama Dr. Rais Yatim Ph.D

When asked to comment, the Minister-in-charge for Telcos Dato’ Seri Utama Dr Rais Yatim Ph.D claimed the “Government has no say in imposition of the tax. Its the Telcos decision”. Many felt his Ministry could do much more.

On the other hand, Prime Minister Dato’ Seri Mohd. Najib Tun Razak took better attention on this, much better than Dr Rais.

Published: Friday September 9, 2011 MYT 7:22:00 PM
Updated: Friday September 9, 2011 MYT 8:34:24 PM

PM: Reconsider 6pc charge on prepaid phone lines


KUALA LUMPUR: Datuk Seri Najib Tun Razak hopes telcos can reconsider the decision to impose a 6% charge on prepaid mobile users.

He said he received a lot of reactions from the public and the decision was an unpopular one.

“I hope the telcos can reconsider this move because we are trying to reduce the burden of the public who are already suffering from the increase in living costs,” said Najib.

He said the decision to impose the tax was not made by the Finance Ministry.


The truth is that, the service tax had always been imposed since 1998. However, all the while the Telcos have been absorbing the tax. When prepaid packages were introduced back then, it is thought that it would be easier for commercial purposes that they were sold net and the Telcos absorb the charges inside each packages sold. Now, the service tax is to be passed to the consumers.

It was said this who process prior to the announcement is out of the radar scope of Dr Rais and it is unsure why is it so since Telco industry is under his watch. Series of meetings were held, which include with MOF and Royal Customs before it was decided to be announced.

Malaysian Communications and Multimedia Commission as the regulatory body under Dr Rais’s Ministry should have held talks with the Telcos, understand and work with them on the issues. One of the steps that could have been taken is to ask the Telcos what is the real value that the consumers get when prepaid packages were sold and subsequently, the top-ups.

Next, would be the process of doing the comprehensive audit for such exercise. Then, the true value that concumers get could be realised and whatever service tax could be factored in each packages sold. Even at that point, MCMC could work with the Telcos on how to serve the majority of the consumer especially in the lower income category on how these services offered to them without being seen as a ‘burden’ in the already ‘shrinking on the Ringgit Malaysia’.

But it was made to understand this did not happen. Dr Rais as the Minister did not do his best to serve the interest of the rakyat, first. All he is doing at the moment is to echo what PM Najib already said a few hours earlier.

Just not to put a finer point to that but actors do this (echo previously said statements or phrases) very well. Don’t you think so?

Published in: on September 10, 2011 at 12:00  Comments (12)