By KINIBIZ
This week, the government announced that mobile prepaid users will now get RM10 prepaid credit for every RM10 they pay. But this is simply not true and misleading.
Let’s recall what Communication and Multimedia Minister Ahmad Shabery Cheek said: “From now on, users paying RM10 for mobile prepaid credit would get RM10 mobile prepaid credit. This is a ‘win-win situation’.” He was quoted as saying by Bernama, considering users are currently paying RM10.60 for RM10 mobile prepaid credit.
But is there an actual difference here? No. Here’s why.
When the goods and services tax (GST) kicked in on April 1 this year, users were charged RM10.60 for RM10 worth of mobile prepaid credit. The extra 60 sen is the GST charge. Effectively users were paying 6% more than the mobile prepaid credit value they were getting.
With the new arrangement, it looks like users are getting RM10 in mobile prepaid credit for RM10 paid. But the RM10 is before GST. When they start using the mobile prepaid credit they bought, the GST would kick in and take away 6% of the value. So after GST users will still only get RM9.43 for every RM10 they pay — it is just a question of when the GST amount is charged.
In other words, users are still paying 6% more than the prepaid credit value they are getting.
And telcos are benefitting. Recall that before GST, there was sales tax of 6%. However, this tax was absorbed by telcos before the days of GST, meaning they paid this 6% and let users get RM10 mobile prepaid credit for every RM10 paid.
So either way, telcos win because they no longer absorb 6%. And prepaid users lose because either way they are still getting 6% less in prepaid credit value than they used to for the same amount paid.
In any case, here are a selection of our best news, analyses, and comments this week for your reading pleasure:
Pick 1 — A dodgy RM26 billion venture? Years after Putrajaya announced a private finance initiative drive to fund public infrastructure, details remain obscure despite billions raised. KINIBIZ tracks what little is known and how the ball started rolling, then pieces together a strange picture revolving around a RM26 billion debt pile. Start reading here.
Pick 2 — Is 1MDB being bailed out? Pilgrimage fund Tabung Haji is buying land from controversial 1Malaysia Development Bhd (1MDB) for RM188 million while Retirement Fund Inc (KWAP) is paying RM155 million for another land parcel. Investments or bailout? KINIBIZ investigates in a two-part issue series. Start reading here.
Pick 3 — MAS changes tack with Dunleavy departure? Signs indicate that Malaysia Airlines or MAS may be tweaking its recent revenue management model which has failed it previously. If that is so, its future prospects are decidedly brighter. Why so? Read what our resident cat had to say on the matter here.
Pick 4 — Location’s wrong for RM40 billion high-speed rail. The high-speed rail project between Kuala Lumpur and Singapore, estimated to cost RM40 billion, boasts 90-minute travel from point to point. But the terminuses are hardly considered city centres and this means the actual travel time would be well beyond 90 minutes. Is it worth the money? Read on here.
Pick 5 — 1MDB’s Track 3B power project should be re-tendered. National utility provider Tenaga Nasional Bhd is in talks with 1MDB to purchase the latter’s stake in the Track 3B power plant project. But whatever happened to due process of open tender that Putrajaya promised? Why allow 1MDB to probably make a profit by flipping its stake to Tenaga? Read more here.
Pick 7 — An app for anything? In San Fransisco, dubbed the ‘capital of Internet La La Land’, there is an app for any concierge service you may need these days: groceries, laundry, you name it. Is this the future? Is Malaysia ready for this future? Probably not. But here’s to hoping for that one fine day when we are, writes our resident cat here.
Pick 8 — Why Malaysia should remain secular. While there is considerable pressure to introduce Islamic law into Malaysia succumbing will be a major mistake. The only way to move forward is through secular laws which protect all religions equally and prevent oppression of minority faiths, argues our founding editor here.
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– by Khairie Hisyam Aliman, News Editor