Ordinary mobile phones are subject to sales tax of 10% whereas Personal Digital Assistant (PDA) with Global System Mobile (eg. smart phones) which may function as a mobile phone is given sales exemption.

In order to streamline the discrepancy in sales tax treatment between ordinary phones and smart phones, the Malaysia government is now proposed that all mobile phones including smart phones be exempted from sales tax, with immediate effect from Oct 15, 2010.

PDA or smart phones are gaining popularity nowadays and potential buyers to these products may not feel the price differential as PDA or smart phones are already exempted from sales tax. As such, the price packages for iPhone 4 offered by Maxis and DiGi may remain the same and no change.

Visit our Malaysia Budget 2011 – Summary and Highlights