PETALING JAYA: The removal of the 10% sales tax on ordinary mobile phones should make the phones more affordable especially to first-time buyers, but don’t expect a huge drop, experts say.
The idea is to streamline the tax treatment for ordinary phones since there is no sales tax for smartphones and those with Internet applications. Hence, there will be no more taxes on mobile phones.
Yesterday Prime Minister Datuk Seri Najib Tun Razak announced that ordinary phones would be exempted from the 10% sales tax.
The mere mention of the abolishment of the 10% sales tax got a lot of people excited and those providers that were selling the iPhone were inundated with enquiries. Some people were eager to book the iPhone for they thought the prices would come down.
This is not what the players have in mind as the prices of smartphones are not likely to come down; only the ordinary mobile phone pricing will come down.
The abolishment allows first-time users to buy a phone and since cellular coverage is being extended to a wider portion of the population, the potential of more people, especially students and those in the rural areas getting connected is there.
It also allowed the players to bundle the phones since there was no sales tax, said an analyst.
“It creates a level playing field for mobile operators. Currently the market for mobile phones is dominated by independent merchants, or what we call small shops. The suspicion is that they do not pay taxes and under declare. That has been cited as a key disadvantage for big mobile phone operators to do bundling. So this development is positive for mobile operators,’’ said the analyst.
Nokia Singapore/Malaysia & Brunei general manager Vlasta Berka said that as ‘‘more mobile devices are able to access the Internet, including the more affordable models, the dividing line between “ordinary” phones and feature phones is getting smaller. “Furthermore, in today’s era of connectivity and with the continued rise in social media, we have always viewed mobile technology as a staple and a must-own, rather than a luxury,’’ he said.
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