Wednesday, December 30, 2009

RM50 Credit Card Tax To Start On Anniversary Date On New Year 2010

Posted on/at 11:25:00 AM by SBdude

RM50 credit card tax starts New Year’s Day

Applicants issued with new credit and charge cards next year will have to pay the RM50 service tax upfront. For existing card holders, the charge will be imposed on the anniversary date of cardsSecond Finance Minister Datuk Seri Ahmad Husni Hanadzlah, who confirmed this with The Star yesterday, said the Government would impose the service tax for credit and charge cards from next year.

Existing cardholders will only be charged the service tax through their issuing banks upon the aniversary date of the card.

“For example, if the card’s anniversary date is in January, then you pay the tax in January. But if the date is in April, then you only pay the tax in April,” he added.

The minister’s clarification puts to rest nagging doubts among the millions of credit card holders in the country who have been raising queries since Prime Minister Datuk Seri Najib Tun Razak announced the new tax when he unveiled Budget 2010 in October.

Najib, who is also the Finance Minister, had said that a RM50 service tax for principal credit and charge cards and a RM25 for supplementary cards would be imposed from January.

This has led to card holders asking if the charges will be imposed from Jan 1 or on the anniversary dates of the cards, which are usually issued for a three-year period.

Meanwhile, many banks in Malaysia are strategising to help customers pay the government service tax on credit cards effective Jan 1, 2010. The banks are willing to allow customers to utilise their points collected to help pay the tax charge.

Master Card and Visa Credit Card Issued By Various Banks

Other banks have also said that consumers could easily offset the tax with the many cash rebates offered with their credit cards.

Earlier,The Government had announced in Budget 2010 that an annual service tax of RM50 will be imposed for each principal credit card and RM25 for each supplementary card, in an effort to encourage prudent spending.

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