RM50 Service Tax for Credit Card Starting 2010

89. Credit cards are being used extensively. The number has increased from more than 2 million in 1997 to 11 million as at August 2009, excluding 285,000 charge cards. To promote prudent spending, the Government proposes that a service tax of RM50 a year be imposed on each principal credit card and charge card, including those issued free of charge. The Government also proposes that service tax of RM25 a year be imposed on each supplementary card. This measure is effective from 1 January 2010.

I’m sure many of you are aware of this. This is one of the thing brought up in 2010 Budget. Many people are not happy with it and so do I.

All these years, I never need to pay annual fee for my credit card. Now, they are saying that each card will be charged with RM50 service tax for primary card and RM25 for supplementary card is crazy!

Those with many credit cards now are in the process of canceling their card so that they won’t be taxed next year. Those that like to collect credit cards will not be able to collect anymore card.

If a person is required to pay an annual fee to the bank all these while, then add in with the government tax which is RM50 starting next year, this will mean they will be paying a lot! It’s not just a matter of RM50 service tax, it will affect a lot of people not only the consumer but also the financial institution here. For example:
RM50(service tax)+RM80(annual fee)=RM130, this is only for one card. If you have more, the amount will be crazy!

It won’t help people in being responsible in their spending and not everyone having a credit card is irresponsible in spending. I have credit card is because it is convenient, it’s not safe to bring large amount of cash nowadays. I do not spend until I max my card. I pay my bill on time, never owe a single cent.

Not only that, some people are using their credit card to turnaround in business that helps them maintain their business but now with such thing, they will have problem.

As for the banks, they’ve been encourage people to sign up for their credit card. Now, who wants to sign up? The banks will suffer a lot of loss especially those promoters, they rely on people signing up for credit card so that they have income. If this is the case, no one will sign up with them, they got no more jobs anymore! No money means no food, no food, then you can loss weight without spending on appetite suppressant? *shake head*

Good luck everyone!