More income for local telco

From 15th September onward, all purchase of prepaid reloads and prepaid starter/SIM packs for all telcos will be charged a six per cent of service tax.

The telcos said the service tax on prepaid already exist since 1998 but it was absorbed by them until now.

According to them service tax is a consumption tax and is chargeable to the customer. This is similar to the service tax levied on food and beverage purchase in restaurants and hotels.

With the 'passing' of this service tax to consumer, meaning a prepaid phone user who buys a RM10 prepaid reload will have to pay RM10.60, with RM0.60 as service tax.

With the service tax being 'transfer' to customer from 15th Sept onward, the local telcos will have 6% more as their income. For sure, there are going to benefit from it.

This is not a good sign to consumer as more money to spend and pocket hole is getting bigger now. There are happy but not customer....