MCMC: No memo on prepaid service tax

The Malaysian Communications and Multimedia Commission (MCMC) says that it has not issued a memo to telecommunication industry players instructing them to be prepared for a proposed six per cent tax on prepaid phone subscribers.

The telecommunications regulator issued this clarification following a news report on a Hong Leong Investment Bank Research note on prospects for the local telecommunications industry.

MCMC also described the speculation as confusing and misleading.

HLIB Research had quoted industry sources as saying that telcos may be finally allowed to pass on the six per cent service tax to prepaid subscribers later this year.

Describing the report as highly speculative, MCMC chairman Datuk Mohamed Sharil Tarmizi said: "No such instruction was issued on this matter."

"Discussions are actively being carried out to find the best and most equitable solution so that consumers will continue to receive affordable communications services that will benefit the people," he said in a statement.

Mohamed Sharil said any action taken in this regard would not be burdensome to consumers.

HLIB Research had also speculated that the imposition of the six per cent service tax coupled with the broadband tax incentive implemented last year would further enhance telcos' earnings in the longer term. -- Bernama