According to RHB Research in a note to clients on Friday, the reintroduction of the goods and services tax (GST) could harm the telco industry, with Digi the most affected.
At the time of writing on Friday, Digi shares had slipped two sen or 0.46 percent to RM4.31, with a market value of RM33.51 billion.
RHB Research says, the reimposition of the GST on prepaid may be perceived as counter-intuitive and a politically sensitive issue, especially when the rakyat’s welfare is still a top priority.
“We believe that the significant backlash from prepaid users and the subsequent confusion that followed the transition to a GST regime and the subsequent rollback of the SST in 2018 have resulted in a stalemate on how the issue should be addressed going forward.
“Prepaid tax collection was previously reported to be above RM1 billion annually, not a meagre sum considering the tight government finances.
“Before the GST is reintroduced, we believe there are a few issues worth considering,” RBH says.
The GST was first implemented in 2015, but was later repealed by the Pakatan Harapan government in 2018, , followed by the reintroduction of the sales and service tax (SST).
