MP SPEAKS Can you imagine, exactly one month after the official implementation of the Goods and Services Tax (GST), the prime minister had to tweet, "Shabery Cheek please take charge of the top-up issue. Starting now, any announcement to the people can only be made by the KKMM minister", because the Government acted like a headless chicken, flip-flopping like nobody’s business.
The uproar arose because in the past, the telecommunication (telco) companies had absorbed the 6 percent sales and services tax (SST) for prepaid mobile services sale to consumers.
However, with the abolition of the SST and the imposition of the 6 percent GST, the telco companies took advantage of the situation to pass the 'new' tax onto the customers, resulting in an immediate price hike of 6 percent for the consumers.
It is of course too much to expect the Najib administration to have resolved this issue before GST is implemented.
However, it is stupefying how this matter hasn’t been resolved after more than 30 days!
Deputy Finance Minister Ahmad Maslan had threatened to take the telecommunication companies to court for raising the price of their prepaid services on April 2, 2015.
He tweeted “… harga tidak berubah. Jika mereka degil, akan dibawa ke mahkamah! (…the price remains unchanged. If they are stubborn, they will be brought to court!)”
A telco victory
After several conflicting announcements by the Customs Department and the Malaysia Communications and Multimedia Commission (MCMC), Ahmad then went on to announce that the price of prepaid reload cards would revert to the pre-April prices on May 1.
He said that the four telcos had agreed to revert to the old prices, but needed a month to correct the situation.
The deputy finance minister once again tweeted “ Keputusan kabinet minta tak naik harga walau ada GST. Sama dgn keputusan saya jumpa 4 CEO Telco smlm . (Cabinet's decision to ask for the price not to be increased, even with GST. It is the same message when I met with four telco CEOs yesterday.”
However, the telco companies did not reinstate the pre-GST rates yesterday. Communications and Multimedia Minister Shabery Cheek defended them, claiming that the price was quite impossible to implement due to the complexity of system reconfiguration.
He said, "Prepaid reloads also involve payment made through banks and electronic payment methods, besides involving as many as 30,000 agents across the country... a change in software and systems needs to be done to ensure that it runs smoothly."
It would appear that based on Prime Minister Najib Abdul Razak’s tweet, Shabery ( left ) won the fight on behalf of the telco companies.
This, unfortunately, is a massive setback for the equitable implementation of the GST and ordinary Malaysians.
The excuse that the software systems were difficult to recalibrate, requiring more than month to complete is nothing more than utter bunkum.
The cartel-like attempt by the telco companies to stop absorbing taxes, despite no changes at all to the actual tax rate, and to pass them onto consumers is nothing less than a profiteering exercise.
Under the previous regime, consumers paid RM9.43 to receive RM10 worth of mobile services value.
Today, without taking into consideration the taxes, consumers are forced to pay 6 percent more at RM10 to receive RM10 worth of mobile services value.
Who's profiteering again?
Najib blamed the GST burden currently experienced by the people on profiteering activities.
Yesterday, he called on the relevant authorities to come down hard on the profiteers and unscrupulous traders who manipulated the GST for their own extra financial gains.
The question must hence be asked, why is it that the authorities are only allowed to “come down hard” on ordinary traders, many of whom were forced to raised prices beyond the GST rate due to the substantial increase in cost of doing business to comply with the GST implementation?
Why is it when it is the giant multi-billion ringgit telco companies which were blatantly raising prices and profiteering from the GST implementation treated with such kids gloves?
The prime minister must stop the unfair duplicity in government policies which favour large corporations.
In 2014, Maxis Communications, Digi Telecommunications, and Celcom Axiata made pre-tax profits of RM2.44 billion, RM2.65 billion, and RM3.1 billion respectively.
In total, they collected RM12.8 billion in prepaid mobile services revenue for the year.
The same Anti-Profiteering Act must be imposed equally and fairly on petty traders deemed unscrupulous for raising prices post-GST, as it must be imposed on the unscrupulous telecommunication companies which trampled on the Act despite making billions of ringgit in profits.
TONY PUA is DAP national publicity secretary and Petaling Jaya Utara MP.
