Telcos told to stop charging SST on prepaid reloads by MoF

PETALING JAYA: Telecommunications companies have been instructed to stop charging the Sales and Services Tax (SST) on Malaysians for the purchase of prepaid reloads.
The Finance Ministry said this tax exemption on prepaid services was to address the issue of companies having difficulties in adjusting their systems in view of the SST implementation on Sept 1.
The ministry said through this exemption, prepaid telecommunications users will get a full credit value when they make reloads.
"A different method will be announced later for telecommunications companies so that the government does not lose out in an attempt to ensure customers get the full value of the amount paid (for their prepaid reloads).
"All telecommunications companies need to take the necessary measures immediately in abiding with the tax exemption directive," it said in a statement today.
The ministry said the tax exemption would take effect tomorrow (Sept 6) and that it was based on Section 34(3)(a) of the Services Tax Act 2018.
The Finance Minister had on Sunday assured prepaid users that they would receive the full value paid and rubbished claims on social media that reloads were not exempted from SST.
His statement came following dissatisfaction among users who complained that they have been getting less value after reloading, with an RM10 top up only getting them RM9.43 of credit after tax deduction.