The uproar from various quarters over the passing on of the six percent sales tax to consumers by telecommunication companies, effective Sept 15, is not surprising, says OSK Research."It was anticipated to create a social backlash, especially under the prevailing economic environment," it added.
OSK Research said as prepaid users are typically price sensitive, bearing the additional cost could deter them from using mobile services or cut down on usage, thus putting pressure on the revenue of the telcos over the longer term.
"While media reports indicate that no prior approval was secured from the Ministry of Finance for the pass-through, we note that the decision is a collective one, which does not require government approval or green light from the Malaysian Communications and Multimedia Commission.
"This development contrasts with the deferment of the passenger service charge by Malaysia Airports, which comes directly under the purview of the Transport Ministry," the research firm said in a statement today.
OSK Research said it had initially expected the pass-through to proceed, although the latest turn of events, including the call by the Prime Minister Najib Abdul Razak, changes this view.
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