‘Telcos passing down GST as expected’

KUCHING: With all the furor over whether telecommunication service providers should or should not pass down the Goods and Services Tax (GST) to customers, channel checks confirmed that GST is applied on prepaid reloads at all the four major wireless telcos.

It is noted that prepaid users pay an incremental amount for GST above their reload values.

For prepaid starter packs however, Maxis and Celcom have chosen to absorb the GST, meaning prepaid users are status quo before and after GST implementation. For Digi and UMobile, prepaid users now incur an additional six per cent GST for the purchase of starter packs.

An analyst from AllianceDBS Research Sdn Bhd (AllianceDBS Research) affirmed that this will have a positive impact on the mobile operators given that they had been absorbing the old six per cent service tax on behalf of their prepaid subscribers in the past.

“There are two comforting points in this. First, a change in pricing structure to price plus GST (as opposed to GST-inclusive pricing) is preferable as this would minimise potential negative impacts to earnings for mobile operators if the GST rate is hiked in the future,” it explained in a note yesterday.

“Second, as all the mobile operators are passing on the GST, this alleviates previous concerns that some players might want to be aggressive to gain market share by continuing to absorb the tax instead.

AllianceDBS Research had conservatively assumed a three per cent effective increase in prepaid revenue for the mobile players as it believed usage might be slightly impacted due to price inflation in the economy.

“This had previously led to an earnings upgrade of about two to five per cent for the mobile players in FY15 to FY16F.”

The analyst pegged DiGi.com Bhd to benefit the most as it has the highest percentage of revenue generated from prepaid subscribers compared to peers.

In a separate report, Maybank Investment Bank Bhd (Maybank IB Research) the implementation of GST effectively allows wireless telcos a chance to pass on the tax they previously absorbed in the prepaid segment.

Thus, it should come as no surprise that consumers now bear the GST charge for reloads.

“The differing GST treatment on prepaid starter packs by telcos serves to emphasise our point that the benefits of GST are not as clear-cut as simply a direct flow-through of the previously foregone revenue down to EBITDA (earnings before interest, tax, depreciation and amortisation),” it said.

“There are elasticity considerations, and competition remains intense, meaning part of the newfound revenue could be returned back to customers in the form of lower effective tariffs. It remains to be seen how price points would eventually trend in the coming months.

“We have assumed operators enjoy the equivalent of a three per cent passthrough in service taxes in our earnings forecasts.”

Read more: http://www.theborneopost.com/2015/04/03/telcos-passing-down-gst-as-expected/#ixzz3WWgVkOnb

Sheda: Slowdown in property sales expected in near term

KUCHING: Many property developers foresee a slowdown in sales of commercial properties with the Goods and Services Tax (GST) coming into play today.

According to Sarawak Housing and Real Estate Association (Sheda), many developers expressed concerns that “many things are still uncertain” and that “business sentiments are not doing well.”

This, the association said, was examplified by the demand of houses from the last three months which grew stronger in terms of unit bookings as these bookings are subjected to the purchasers ability to secure banks’ housing loan, it said yesterday.

Eventhough residential houses are exempted, Sheda observed that building materials, labour and machineries hire will be subjected to GST which input tax cannot be claimed back.

“Thus, there is an estimate of two to three per cent increase in construction costs of new residential houses,” it added in its statement to The Borneo Post.

“Whether selling price of houses will increase or not, are still subjected to market forces of supply and demand even though the cost has increased slightly.”

Purchasers can hunt for new houses that are nearly or completed as the developers might still sell the houses at pre-GST prices or completed second~hand houses, as these type of house prices might not goes up immediately after April 1.

“It pays to shop around and compare prices,” it advised.

Meanwhile, Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz urged property developers to remain vigilant in their cost measures to ensure that properties are still attractive after the implementation of GST.

He said as responsible developers, they should take the lead in overcoming problems of overdevelopment so that home prices are within reach of citizens.

“I hope the social responsibility of developers to continue helping the Government in achieving progress by offering quality and affordable products to the masses will continue,” he said at the Malaysia Property Insight Prestigious Developer Awards 2015 here yesterday.

Read more: http://www.theborneopost.com/2015/04/01/sheda-slowdown-in-property-sales-expected-in-near-term/#ixzz3W8hAkoCx

CMS Awarded Big Chunk of State Land

KUCHING: Foreseeing the growing demand for residential as well as commercial property at the Samalaju Industrial Zone, Samalaju Properties Sdn Bhd (Samalaju Properties) is currently developing the Samalaju Eco Park Township.

Ryan Jalla Ridu, the senior marketing and product development executive for the company noted that, “The Samalaju Eco Park was born out of our vision to provide a balanced, healthy and sustainable lifestyle to the thousands working in Sarawak’s energy intensive and heavy industries. The town has been developed with its future residents in mind, by firstly understanding the needs of the current and future community.”

The Eco Park is carefully laid out to receive minimal sun exposure yet maximum daylight and air flow. They are also placed such that each home is a short leisurely walk away from recreational spaces, parks and community amenities, increasing the conveniences of residents.

The full development which is slated to be completed in five to 10 years time is approximately 2000 acres. The township, a first of its kind green township development with a mix of residential and commercial developments, has been planned to cater to lifestyles of the future. The Eco Park will be progressively developed and enlarged to stay updated to changing living trends.

Governing each phase of development is a set of stringent mandatory guidelines focused on environmental, economic and social sustainability.

Planned as a self-contained and fully equipped township, residents enjoy easy accessibility to all their daily needs. Tree- lined pedestrian paths, bicycle tracks and public bus and rail transportation networks connect homes to a multitude of amenities such as F&B services, post office, parks and recreational facilities, allowing residents to enjoy car-free lifestyle.

Having obtained approvals from the Sarawak State Government, construction of the first 160 units of apartments has commenced, and is expected to be ready by the first quarter of 2016.

The commercial centre of the township, which will comprise of a mix of shop-houses, mix-use complexes, markets, shopping centres will be centred on a canal system, with shops being afforded frontages of the canal and river walk. It will provide a conducive environment for a variety of commercial and entertainment outlets and activities and will encompass alfresco dining, street cafes and markets as well as entertainment outlets.

For more information regarding the project, please call Samalaju Properties at 082-238888 or visit the company at Level 6, Wisma Mahmud, Jalan Sungai Sarawak, 93100 Kuching, Sarawak, Malaysia.

Read more: http://www.theborneopost.com/2015/03/31/samalaju-eco-park-in-the-making/#ixzz3Vxq0qrPd

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Financial War by American Government on Russian people and businesses

Financial War

Subject to Sanction

By Indira A.R. Lakshmanan | Updated July 17, 2014

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When diplomacy failed, war used to be inevitable, the continuation of politics by other means. Today, when persuasion doesn’t work, big powers turn to economic combat as their first resort. Sanctions occupy a messy zone between condemnations and air strikes. Hard to organize and uncertain in impact, they can hurt innocents and legitimate businesses. Russia’s seizure of Crimea and threats to eastern Ukraine are putting the effectiveness of sanctions to their latest test.

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The Situation

Source: Peterson Institute for International Economics

The use of financial warfare as an alternative to military force has grown dramatically in the new century. Since 2000, the U.S., European Union, Australia, Canada, Japan, Israel, Russia, South Korea and international organizations have imposed sanctions in at least 20 cases on nations including Myanmar, Sudan and Syria. No modern nation has wielded economic weapons more than the U.S., which restricted imports, exports, investments and other financial transactions more than 110 times in the 20th century to try to change policies, end weapons programs or topple a government. The U.S. Treasury became a prominent national security player after the terrorist attacks of Sept. 11, 2001. Its self-described “guerrillas in gray suits” manage 37 sanctions programs that target governments, individuals, terrorist groups or criminal organizations in about 20 countries. They range from asset freezes on Mexican drug lords and Russian oligarchs to bans on business with Iran and North Korea. U.S. and EU sanctions on Iran since 2010, honored by every nation that had been importing Iranian oil, squeezed its economic lifeline, tanked its currency, spiked inflation, and helped Hasan Rouhani win election last June on a pledge to get them eased. Within months, Iran returned to nuclear talks and made limited but historic concessions.

The Background

Source: Columbia International Affairs Online (CIAO)

The first documented use of economic pressure for political ends dates to ancient Greece (the city-state of Megara banned trade with Athens in 432 B.C.). The U.S. Treasury first employed sanctions before the 1812 War against Britain. Woodrow Wilson was the first modern leader to promote financial pressure as an alternative to combat. The most effective sanctions are crippling ones imposed by multiple countries; the global boycott of South Africa over its apartheid policy in the 1980s led to elections that ushered the black majority to power. The worst case of unintended consequences may be the U.S. oil embargo on Japan that unleashed a chain of events leading to the bombing of Pearl Harbor. Sanctions on Saddam Hussein’s Iraq were criticized as toothless, indiscriminate and corrupt; in retrospect, they were proven to have cut off funding for his weapons of mass destruction.

The Argument

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Debate over what kind of sanctions might keep Russia out of Ukraine shows how tricky they are to apply successfully. EU trade ties, including reliance on Russian gas, have caused squeamishness about broad trade embargoes that could harm U.S. and European companies. At first, penalties were mostly tailored to target individuals, industries or institutions – with exemptions for food and humanitarian goods. In July, the U.S. and E.U. upped the ante with sanctions limiting the access of Russian companies to markets and credit. The hardest cases may be Cuba and North Korea, where broad U.S. embargoes in place for more than half a century failed to change regimes or policies. Democratic or quasi-democratic states that care about international opinion and rely on global trade and finance are likeliest to respond, while isolated authoritarian regimes often don’t. With Russia, sanctions brought down Russian stock prices, weakened the ruble and brought warnings of recession; the question is whether that’s enough to make President Vladimir Putin sweat.

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