Why are telcos allowed to profit from GST while small traders face scrutiny?

Question

Accepted Answer

Telcos Accused of Double Standards in GST Implementation, Profiteering While Small Traders Face Scrutiny

DAP’s Tony Pua has asserted that telecommunication companies (telcos) are being treated with leniency regarding the Goods and Services Tax (GST) implementation, allowing them to profit from the new tax while ordinary traders face stringent scrutiny. This alleged double standard is evident in the decision to permit telcos to raise prices on prepaid mobile reloads, a move Pua described as a "cartel-like attempt" to exploit the tax change. The situation highlights a perceived inconsistency in applying policies against profiteering, with large corporations seemingly exempt from the same pressures faced by smaller businesses.
Telcos Pushing Tax Burden to Consumers

The core of the issue lies in telcos passing the GST burden directly onto consumers, despite the tax rate on their services remaining effectively unchanged from the previous Sales and Service Tax (SST). Pua argued that this demonstrates a lack of genuine cost adjustment, suggesting instead a deliberate strategy to increase profit margins under the guise of tax compliance. The largest telcos, including Maxis, DiGi, and Celcom, collectively reported RM8.19 billion in pre-tax profits last year, with RM12.8 billion generated from prepaid mobile sales alone, underscoring their capacity to absorb, rather than pass on, such costs.
Questioning the Authorities' Stance

Pua questioned the differential treatment between large corporations and small businesses, highlighting that ordinary traders are often "come down hard" upon for price increases related to GST. He contrasted this with the perceived "kids gloves" approach towards multi-billion ringgit telco companies that openly raise prices and profit from the implementation of the consumption tax. This disparity raises concerns about the fairness and consistent application of regulations designed to protect consumers from unfair pricing practices.
Calls for Equal Application of Anti-Profiteering Act

In response to the situation, Pua called for the equal enforcement of the Anti-Profiteering Act. He argued that the Act should apply just as rigorously to telecommunication companies that are perceived as unscrupulous by raising prices post-GST, as it does to petty traders who might be deemed unethical for similar actions. This advocacy underscores a demand for a level playing field in regulatory oversight, ensuring that all businesses, regardless of size, are held to the same standards of conduct.
Government Intervention and Conflicting Signals

The issue prompted intervention from Prime Minister Datuk Seri Najib Razak, who instructed the Communication and Multimedia Minister to address the matter and imposed a gag order on non-ministers. This followed earlier warnings from Deputy Finance Minister Datuk Ahmad Maslan against telcos raising prices. Despite an initial directive from the Customs Department director-general for telcos to revert prepaid reload prices to pre-GST levels by May 1, the Malaysian Communications and Multimedia Commission (MCMC) subsequently announced that GST would still be added to the price of prepaid reloads, creating confusion and perceived policy reversals.

Reading history

Hide →

This history is cleared when the page is closed.

Why are telcos allowed to profit from GST while small traders face scrutiny?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends