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)  

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12 CommentsLeave a comment

  1. Another ASTRO story

  2. Biggie,

    Have you heard about Rais’s latest ‘Ministerial Directive’ to all industry players (TM, Celcom, Maxis, Digi etc)?

    That we the Telcos all have to give MCMC RM30,000 each for KPKK to use for next week’s national day celebrations… Because they are hiring some event company to do it for them (last minute, so the service fee is inflated).

    It was said some of these players tried to just give 15K but were told by Dato ** that if don’t pay 30K, it is considered a ‘non-compliance’.


    You should ask for an investigation

  3. teruk la Rais Yatim ni. SLOW!

  4. Why not we call a spade a spade.

    This increment has nothing to do with services tax at all. It has been paid by telco from the very beginning to the govt. Obviously paid using the money telco receive from customer. Don’t tell me the telco have to sell their own property to pay for the taxes.

    So what’s happening here actually is telco increasing prepaid price by 6%. They are just letting the govt to be the scapegoat. Don’t let the telco wins the war of perception.

    • You’re absolutely right. The telcos are actually increasing the price of prepaid and use the Govt as the scapegoat by saying that it is to cover the 6% service tax. So greedy & unethical!

      I think the consumers as a protest shd collectively just reduce their prepaid phone usage by 50%. There are other alternatives to communicate… fixed phone line, Facebook, Skype, email etc etc

  5. It is totally unfathomable why Rais, with all the resources he has under him, did not ask any of this hundreds if not thousands of staff in the Ministry and the various departments and agencies, to check the laws and regulations pertaining to service tax.

    Take 1-2 days, then provide the full clarification on the matter. No need to rush and make doubtful statements and making the public wonder on his ability as a Minister, seen to have been engaged in bringing people to court.

    The service tax issue has long been raising doubts. For example, some restaurants and shops charge customers the tax, others don’t.

    The Government Officers under him, especially the Secretary General of the Ministry of Information and Mass Media, and the Director General of Information, should also have been aware of the possible questioning by the public as to what exactly is service tax when DS Najib was reported asking the telcos to re-consider the charging of service tax as it was inconveniencing the public.

    Bernama, too, could have done the same – ask their editors to check the service tax rlaws, rules and regulations, arm their reporters with the relevant questions designed to draw the truths from those interviewed and report them. They, after all, they are the national news agency, aren’t they?

    Either one or more of those Officers and Bernama Managers/ Directors should have directed their staff to check on the actual status and feed the public the correct and up-to-date information. It’s astounding that they don’t appear to be doing so.

  6. Bro, Do u realized that he also failed in managing ASTRO issue. (Kenaikan kadar bayaran ASTRO). Even though he said that cabinet not agree and government want it to stop but as we realized ASTRO TELAH TETAP MENAIKKAN KADARNYA. Orang kg yang hanya membayar kadar basic sebelumnya 60++ telah dikehendaki secara paksa rela membayar RM 80++.
    So what is RAIS na his ministry do?. Do they monitor this thing?. Dia kata rakyat boleh sue ASTRO….but then believe rakyat wont sue ASTRO but they will sue government in the next GE. So he must be responsible his weaken.

  7. chakep oreng puteh

  8. Ask any sane businessman and he will give his pre-paid customers a 6% rebate. But this is Tranasformation Business

  9. tak ke bodoh..6% tu cukai perkhidmatan yg dikenakan oleh kerajaan.. dan selama ini Telco bertindak menyerap cukai tersebut..sekarang dia dah tak nak serap jadi apa masalahnya… kenapa korang tak pergi marah kat KFC,OLDOWN WHITE COFFE,ASTRO dan McDonalds?? Sama je 6% korang bayar selamba je??

    kalau dah marah sangat BAGITAU la KERAJAAN SURUH MANSUH terus cukai perkhidmatan 6% tu… BODOH punya semua orang

  10. I quite like looking through an article that will make people think. Also, many thanks for allowing for me to comment!

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