The Service Tax Act 1975 requires telecommunication companies to levy service tax at the prevailing rate on telecommunication services, including mobile prepaid services. This is similar to the service tax levied on food and beverage purchases from restaurants and hotels,and since it is an indirect tax, it could be passed and charged to the consumers.Why all the furore? It is not something which is alien to us, argghhhh.....but now it hits you hard, right?
Since the launch of mobile prepaid services in 1998, mobile operators have been absorbing the service tax.
According to mobile operators, the move was to ensure mobile prepaid services remained competitive compared with postpaid.So the question is, can't they keep absorbing it? Of course they can, but back to Econs101, the main or ultimate objective of these firms is profit maximization, ant not social obligation nor charity.Can't we force them? You could.....after all you have the consumers power, don't forget without you, they doesn't exist....show solidarity.....unity....fight back!
While the operators claim that it is unavoidable with prepaid rates progressively reduced over the years and it is currently offered at very competitive rates, in contrary they are raking billions of dollars in profits. Though telecommunications analysts view the news as "generally positive" for mobile operators, with DiGi.Com Bhd seen as the biggest beneficiary and Maxis Bhd benefiting the least, it will be hitting hard on the people, and we do not deserve this, especially during hard times like now, with all the inflation etc.
As at June 30 this year, 83 per cent of DiGi's customer base comprised prepaid users. In contrast, about 75 per cent of Maxis' customers were prepaid users.Today, prepaid users are spending about RM36 to RM51 a month on an average, imagine the service tax they could recoup.....Analysts believe the implementation of the service tax is unlikely to reduce prepaid users spending significantly, or in Econs, we call them inelastic demand
Adios......a.h.baharom
In my understanding, whatever tax it is, it goes into our nation's coffer, doesn't it? So now, these telcos feel like they can't afford to be nice to customers anymore. When they stop absorbing, we instead will have to pay the tax, where we should in the first place. Can they throw the textbook, and return to being nice again, because you know what businesses without a smile means.
ReplyDeleteBut then again, those foreigners who mostly use prepaid service, are also paying it, instead of the telcos. Shouldn't that make a little sense in fattening the coffer, which in technicality owned by us.
Dear Soness, which would you prefer, fattening the government's coffer, while rakyat suffers or lessening the rakyats burden especially thru the hard times...fikir-fikirkan
ReplyDeleteI understand the predicament we're facing. Fattening the nation's coffer can sometimes mean thickening of certain people's wallets. While not wanting to delve into that, as from my first comment, I did not fully agree with the proposal. It's only an insinuation, which I know didn't fall on the right ear.
ReplyDeleteBut since the telcos now deferred the decision, we could have a sigh of relief, albeit temporarily, before they concoct new way of doing the same with a different name. If they really want to do it, then, maybe we could minimize the flow of our money outside by taxing numbers registered by foreigners. Sounds very discriminatory, but then again, when we go there, things like these are not considered 'essentials' and we do sometimes have to pay the extra. But then again, they can cancel or retract or rebrand any on-going promotions. It can always be camouflaged that way.
I really don't who's gonna win at this stage. Let's hope the 'real rakyat' will.