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Budget 2016: GST Rebate For Prepaid Users, 20Mbps Broadband

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RECOGNISING that the majority of Malaysian mobile phone users, especially youth, are on prepaid accounts, the Government will be providing rebates on the Goods and Services Tax (GST) for prepaid cards, Malaysian Finance Minister Najib Razak said while tabling the national Budget 2016 in Parliament today (Oct 23).

The rebates will be credited to their accounts from Jan 1, 2016 to Dec 31, 2016, said Najib, who at press time had not given details.

Najib, also the Prime Minister, has not given details yet. His speech is going on now.

The hotly-debated GST of 6% was rolled out on April 1, and created an outrage immediately when it was imposed on prepaid users. Previously, telcos had absorbed the Sales and Service Tax, which was also at the same rate of 6%.

Najib also said that the Malaysian Communications and Multimedia Commission (MCMC) has been instructed to raise the Internet speeds in Malaysia from an average of 5Mbps (megabits per second) to 20Mbps, through a series of investments in fibre backbone and submarine cable projects.

This follows measures Najib announced in May under the 11th Malaysia Plan 11MP, the latest in a series of five-year national development programmes, which included two new infrastructure initiatives as well as efforts to drive down the cost of access.

The two infrastructure initiatives are the High-Speed Broadband 2 (HSBB 2) and Sub-Urban Broadband (SUBB) programmes.

Under the 11MP, the Malaysian Government is targeting broadband infrastructure to reach 95% of populated areas, and to make broadband more affordable, targeting subscription prices at 1% of gross national income (GNI) per capita for fixed-lined broadband.

Still falls short

However, the Budget 2016 broadband measures still fall short of what many, including the National ICT Association of Malaysia (Pikom), were hoping for.

In a statement released earlier this week, Pikom said that the “cost of Internet connectivity in Malaysia is still simply too high.”

The association had recommended that the Government seriously look into regulating the broadband rates by telcos, “and foster competition to encourage greater uptake of broadband.”

Earlier, Pikom had also taken to task Communications and Multimedia Minister Dr Salleh Said Keruak’s assertion that Malaysians preferred slower broadband speeds because of the lower cost.

According to the latest State of the Internet study by US-based Akamai Technologies, while Malaysia has been making progress on the broadband front, the country now ranks behind Sri Lanka and Thailand in average Internet speeds.

Malaysia was also listed in 70th place worldwide, with its average Internet speed of 5.0 megabits per second (Mbps).

Malaysia does not fare much better when it comes to wireless broadband either. According to a Digital News Asia analysis in May, the country is seriously lagging behind its Asean neighbours in terms of cost-per-megabit.-Digital News Asia

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