Pua: Telcos’ tax is illegal


K Pragalath | September 13, 2011
Free Malaysia Today

Decision to charge the 6% service tax is akin to price fixing and is against the soon to be implemented Competition Act 2010, says PJ Utara MP.

PETALING JAYA: Petaling Jaya Utara MP Tony Pua criticised the decision by telecommunication companies to charge the 6% service tax as illegal because the companies were trying to fix prices.

“There is no question that the joint statement (on the decision) and attempt by the four telecommunication companies to raise prices by the same percentage concurrently is illegal because they are colluding to form a cartel for the purposes of price-fixing.

“The real issue at hand is the blatant and coordinated attempt by the telecommunication companies to raise prices concurrently, contemptuous of the competitive spirit,” said Pua.

On Thursday, all the telecomunication companies – Maxis, Digi, Celcom and Unifi – announced in a joint statement that purchases of prepaid reloads and prepaid starterpacks for all telcos will be charged a 6% service tax, effective Sept 15.

Bernama had reported that the move was taken to ensure mobile prepaid services remain competitive compared to the postpaid, given the high prepaid rates for calls and SMS from the onset.

The move, however, did no go down well with politicians from both sides of the divide and the public, and led to a decision to delay taxation to next year.

Yesterday, all telecommunication companies suspended service tax on their pre-paid SIM card packs and reload pending discussions with the Malaysian Communications and Multimedia Commission (MCMC).

‘New law must have bite’

Information, Communications and Culture Minister Rais Yatim said the MCMC would review and determine the best time to implement the tax.

Pua also said that the move to impose taxes is against the Competition Act 2010 which is aimed at promoting competition. It would come into effect in February next year.

“The Competition Act 2010 states that, “the object of the Act is to promote economic development by protecting the process of competition, and thereby the interest of consumers”.

“The bill specifically bans anti-competitive agreements including price fixing, import cartel, bid rigging, territorial allocation, limiting production, market sharing.

“The anti-competitive agreements will be subject to financial penalties of up to 10% of the worldwide turnover of the enterprise over the period during which the infringement occurred,” said Pua who is also DAP’s national publicity secretary.

Pua urged the government, especially the Domestic Trade and Consumer Affairs Ministry to issue a stern warning to the telecommunication companies that their anti-competitive behaviour will not be tolerated.

“The government must act to prove that the Competition Act will protect ordinary consumers and not be trampled upon at will by Malaysian corporate giants,” said Pua.

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  1. #1 by vsp on Tuesday, 13 September 2011 - 10:46 pm

    Petaling Jaya Utara MP Tony Pua criticised the decision by telecommunication companies to charge the 6% service tax as illegal – Tony Phua

    ————-
    Tony Phua is getting his fact screwed up. I am no fan of the telcos. The unconscionable UMNO government gives this right to the telcos because the 6% service tax was introduced into the budget, even though the telcos and banks were earning obscene record profits. Tony, why blame the telco? Don’t ape the UMNO government of shedding crocodile tears. The UMNO government is the one who should be held responsible.

  2. #2 by tak tahan on Tuesday, 13 September 2011 - 11:45 pm

    /“The government must act to prove that the Competition Act will protect ordinary consumers and not be trampled upon at will by Malaysian corporate giants,” said Pua./

    Since the government passed the buck to Telcos..that’s why Pua acted in taichi way urged the government to take the right step and responsibility to intervene and not to pretend as if it is not its duty and prerogative to impose the tax in the first place.

  3. #3 by yhsiew on Wednesday, 14 September 2011 - 12:50 am

    ///Pua urged the government, especially the Domestic Trade and Consumer Affairs Ministry to issue a stern warning to the telecommunication companies that their anti-competitive behaviour will not be tolerated.///

    What about MAS and AirAsia? Shouldn’t they be warned as well?

  4. #4 by Loh on Wednesday, 14 September 2011 - 1:34 am

    ///UPDATED 11.41PM The PM says it is an issue of timing but probably after the next general election, the government will introduce the goods and services tax.///–Malaysiakni

    Najib pretends not to realize that after the next geneal election, he is not in the power to decide on GST matters; the Pakatan Rakyat government would decide!

  5. #5 by boh-liao on Wednesday, 14 September 2011 - 2:41 am

    Monopoly + corruption means $$ exploited fr rakyat goes in2 pockets of UmnoB/BN, QED

  6. #6 by cemerlang on Wednesday, 14 September 2011 - 6:49 am

    teach you all to save money. each time you use their services, each time they know how rich or how poor you are. kenalah. 6% and rising gradually

  7. #7 by Bigjoe on Wednesday, 14 September 2011 - 7:00 am

    It looks like the plan is to remove this tax BUT GST will replace it if after the GE. UMNO/BN has no choice now but to impose GST because its expected that oil prices will fall with general economic slowdown and they are going to spend the money even before the GE..

  8. #8 by yhsiew on Wednesday, 14 September 2011 - 8:19 am

    The nation’s coffers are hollowing out. The government has to replace the 6% Telcos tax with GST in order to survive.

  9. #9 by Jeffrey on Wednesday, 14 September 2011 - 9:43 am

    Is Tony sure that the Telcos’ charging 6% service tax is illegal per Competition Act?

    Firstly he better check the Competition Act Currently, activities performed by the energy, communications and multimedia sectors have been exempted by that Act and other commercial activities may be further exempted by Ministerial order from time to time. Secondly if they don’t charge they may be in violation of Service Tax Act. Service tax charged by TelCo doesn’t go to their revenues but payable to Inland Revenue! Are they fixing prices when they are required by law (Service Tax Act) to collect for remittance to IRD???

  10. #10 by waterfrontcoolie on Wednesday, 14 September 2011 - 9:51 am

    By the way, all so-called professionl bodies who seem to have more power than the average Malaysians are said to br exempted from this Competition Act, even the shipping fraternity is saying that they too must be exempted; so we gonna have a Gomen elected by ALL MALAYSIANs who would come under this Act but those with vested interests will be free to do what they can do to make the same vetors pay for it! Malaysia Boleh!!!

  11. #11 by donplaypuks on Wednesday, 14 September 2011 - 3:39 pm

    I’m no fan of the Telcos, but I can’t see an iota of logic in Tony Pua or anyone else’s view that the Telco have no right to pass on the 6% (it was increased from 5% to 6% last year by Najib) to consumers.

    If GST were to be introduced tomorrow, the consumer would have to bear the additional cost. It is up to the Telcos and anyone else whether they want to abosrg Sales Tax or GST. That is the system in every country in the world which has a sales Tax or GST regime.

    The fact is all Telcos pay Corporate Tax at 27% and they are only only collecting agents for Sales Tax, on behalf of the Government.

    It is the scoundrels from UMNO/BN Govt and Najib aas PM and Minister of Finance who should be taken to task for not exempting prepaid telephone users from Sales Tax, not the Telcos.

    dpp
    we are all of 1 Race, the Human Race

  12. #12 by assamlaksa on Thursday, 15 September 2011 - 9:27 pm

    there is nothing wrong with the telcos when they pass the 6% to consumers but when all of them announcing to doing it together is price fixing.

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