Am I considered lucky to be able to escape from the new RM50 service tax a year on every principal credit card and charge card since I am now in AKPK debt management programme? So is hubby 
Imagine how much annual service tax hubby and I had to pay if we still had the 15 credit cards!! 15 principal credit cards from 6 banks. Phew, it’s RM750!
According to financial analysts, it is predicted that at least 30% of the holders of 11 million cards in circulation who have more than one card will have to pay RM100 every year.
You know, the applications for new credit cards dropped by 80% following the Government’s announcement of the service tax starting 2010.
Don’t you think this new imposition is good to those who are thinking of applying credit cards? It scares them off and thus they carry no credit cards. No credit cards mean no credit card debts, right?
When there are no credit card debts, people will have no reason to turn to non-performing loans, short-term loans, personal loans, debt consolidation loans, AKPK debt management programs, or bankruptcy easily.
It’s also good to those of you who have stacks of credit cards; you are forced to reduce the number of cards you own. Having fewer credit cards means you have to cut down on spending, retail purchases and impulse buying.
Also, you get to learn to use cash and debit cards. As a credit-card-debt woman who is in AKPK’s debt management plan, I must say that I love using cash and debit card now.
I have had two debit cards, Public Bank Visa debit card and Tune Money Visa debit card. Both cards are not used for retail purchases. Noop. They are only used for collecting PayPal money from my online income.
Since PayPal has now allowed Malaysians to link their PayPal accounts to their Malaysian banks or overseas banks operating in Malaysia, I think I can totally stop using and renewing my Tune Money Visa debit card.
As for the Public Bank Visa debit card, I will keep on using as a backup for PayPal fund withdrawals.
{ 5 comments… read them below or add one }
I’m going to cancel my credit cards soon.
Vedis: I think lots of people will do so.
CIMB Group Says RM50 Service Tax On Credit Card Little Disappointing
KUALA LUMPUR, Dec 8 (Bernama) — CIMB Group says it has some reservation about the government’s plan to put a RM50 service tax on credit card.
“We have some reservation because obviously we were hoping that the tax is not necessary because at the end of the day, the idea is to reduce the cash holdings and increase plastic and other forms of payments,” its group chief executive Datuk Seri Nazir Razak said.
“This is something that we are little bit disappointed but of course, we have to comply,” he told reporters here after a signing ceremony today for a RM50 million term loan facility from CIMB Bank Bhd and UBS AG to JCY HDD Technology Sdn Bhd.
To promote prudent spending, the government has proposed a RM50 service tax a year on each principal credit card and charge card and a RM25 service tax a year on each supplementary card effective January 1 next year.
Asked if it is possible for CIMB Bank to absorb the services tax, Nazir said “it is just a matter of economics.”
The bank is hoping to achieve 1.2 million credit card holders by end of the year from the current 1.1 million customers.
Malaysian Rating Corporation Bhd (MARC) recently said that the service tax is unlikely to have an impact on the overall transaction value of cardholders over the medium term.
Cardholders are more likely to cancel extra cards to minimise their tax burden since the tax is proposed to be levied annually on a per card basis, it said.
MARC also believed that the proposed tax will result in an aversion to applying for multiple cards on the part of new applicants and thus the growth rate of issued credit card will lose momentum from the compounded annual growth rate of 13.2 per cent recorded over 2004-2008.
As for card issuers, currently comprising 21 banks and three non-bank financial institutions, this tax will have mixed effects depending on their existing market share and brand positioning, it added.
Source from: bernama.com.my/bernama/v5/news_lite.php?id=460940
Citibank Foresees Reduction In Credit Card Circulation In Malaysia Next Year
KUALA LUMPUR, Dec 10 (Bernama) — Citibank Bhd foresees a reduction in the number of credit cards in circulation in the country next year, following the government’s plan to impose a RM50 service tax, effective Jan 1.
Its chief executive officer Sanjeev Nanavati said the bank suggests that the government impose the service tax on a per customer basis, rather than by the number of card, as every bank has a credit limit.
“I don’t see big debts in Malaysia. I think all banks in the country offer different cards that provide a specific value.
“In the case of Citibank, we have cards that give customers specific value such as for airline, petrol and groceries,” he told reporters after the Citibank Big 50 Contest prize giveaway ceremony here Thursday.
“By imposing the charge per customer, it will allow them to use cards that give them different value. So I think, it make more sense to apply the charge at the customer level, rather than each card they hold,” he added.
To promote prudent spending, the government recently proposed an annual RM50 service tax on each principal credit card and charge card and a RM25 annual service tax on each supplementary card.
On the Citibank Big 50 Contest, Sanjeev said it is to reward loyal customers.
The contest, launched in conjunction with Citibank’s 50th anniversary celebration in Malaysia and held from June 1-Aug 31, attracted more than 10 million entries.
The grand prize winner of the contest was Lu Zen Chai from Limbang, Sarawak. He won a luxurious Mercedes Benz E200K Elegance, valued at more than RM500,000 and 49 extra gifts such as an Ogawa massage chairs, Apple iMac, Apple iPod Shuffle and leather products from Bally.
Source from: bernama.com/bernama/v5/newsindex.php?id=461340
This Tax Will Cost Dearly – Source from Sun2Surf.com
LOOKS like the government will not budge on the RM50 tax on each principal credit card come January. Despite the outcry, it has turned a deaf ear. The relevant ministry has not indicated if there will be a review.
This issue will be exploited at the next general election. The government’s argument is that this tax is imposed to inculcate prudent spending among credit card users. Who had advised the finance minister that such taxes will lead to prudent spending?
The only guaranteed outcome of such a tax is an increase in revenue for the government. The government must show some data on how prudent spending can be achieved and what are the positive outcomes that can be translated as beneficial to the economy. As an ardent user of credit cards, I am now forced to cancel all except maybe one or two of my cards. We will be forced to carry cash which is not safe especially for the elderly, retired and women.
Also, many will postpone or not make a purchase due to lack of cash for retail purchases which could be paid by interest-free instalments charged to the card. This will result in less retail sales translating into a lower turnover for business. Meaning less income and less overall taxes paid to the government. Has this chain reaction been thought through by policymakers? Plastic money is one of the economic drivers, especially within the microeconomic platform. Excessive spending is not due to credit cards per se. There are many other contributing factors.
And what is the percentage of non-performing loans due to credit card use in Malaysia? Is it even significant to the pool of non-performing loans. Will the credit card tax make any huge contribution to the reduction in NPLs? It is critical that the authorities dissect the issue of imposing this new tax. The habit of spending excessively is born out of indiscipline, ignorance and the ease of obtaining credit cards.
Do not punish the majority for the negligence of a few. It is time the government checks the practice of handing out credit cards with no proper credit worthiness assessment of the applicant. The issuers must be more responsible and diligent before punishing their customers and not vice versa.
Narinder Pal Singh
Shah Alam
Wednesday December 16, 2009
No Change to Planned Tax on Credit Cards
PETALING JAYA: There is no change to the planned RM50 service tax for credit cards from next year, Deputy Finance Minister Datuk Chor Chee Heung said.
Chor said the RM25 tax for supplementary cards would also be imposed, despite reports stating otherwise.
“People keep asking me as there is news going around that the supplementary card tax will be abolished,” he said when contacted yesterday.
Chor added that some banks and financial institutions were indirectly picking up the tab by offering certain promotions.
“If the banks want to keep their customers, they should offer to pay for their card-holders,” he said.
Meanwhile, Federation of Malaysian Consumers Associations secretary-general Muhammad Sha’ani Abdullah suggested that one charge be imposed per customer, regardless of the number of cards.
“We want to encourage prudent spending but at the same time, we do not want people to go further into debt.
“The banks should also do their part to absorb the cost, instead of expecting AKPK (Credit Management and Debt Management Agency) to do everything,” he added.
Several banks have posted notices on their websites, informing customers of the guidelines. Some also advised customers not to cancel their cards as they were still waiting for further clarification.
Source from: thestar.com.my/news/story.asp?file=/2009/12/16/nation/5302962&sec=nation