In the recent budget 2010 unveiled by the PM Najib Tun Razak, one of the decision is to impose a RM50 annual service tax on principal credit and charge cards.
“They are getting the RM1,000 tax relief and those paying tax at 27% will now pay 26%. So, they get two (relief measures) and only have to pay RM50 (per credit card). Don’t tell me they cannot pay RM50?” he said.
Yes, Najib has a point.
Why can’t you pay RM50 when you get cut from the tax payment?
However, if Najib to look at the objective of why the RM50 service tax in first place, as far as I understand it correctly, it’s meant to curb overspending.
That means, to those who do not have any outstanding balance and manage to clear the payment by due date, there shouldn’t be any problem for them to cancel their cards in order to avoid the RM50 service tax.
However, those with default outstanding balance (i.e. mostly from the low-income group) and can only afford to make the minimum payment are going to suffer, on top of the RM50 additional service tax as they wouldn’t be able to write off the cards immediately.
I say, if the Government is sincere to curb overspending (instead of robbing rakyat money, knowing the fact there are 11 million active credit cards as at August 2009, excluding 285,000 charge cards), the Government should spend money to provide financial education as well as to introduce programs to help those with credit card debt, especially those who’re unable to even service the minimum payment and to introduce service tax to the later group, it’s like adding salt to the wound.
The Government should have thought carefully before making the unwarranted tax suggestions without considering the probable effects on the overall economy and social well being of the people, such as the possibility of imposing restriction for credit cards and allow only those earning a minimum salary of certain amount (i.e. RM5000 and above) a month to qualify for cards.
Besides, I’m sure credit card agents are caught off guard of this latest announcement, and no thanks to Najib, their rice bowls are now under severe threat while banks are going to make noise soon as one of the major source of revenue is going to diminish tremendously in the next financial year.
As for myself, I’m going to cancel most, if not all of my credit cards, in which I applied over the years, after much persuasion from the agents, whom I believe are making an honest living out of their own effort.
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ahh, now i can tell the peddlers i don’t have Rm50! easier shoo them off :D
i’m a credit card agent, i think will have alot of credit card agent will lost their job, i don’t think is easy to get the biz in the future……Najib…pls don “kill” us..
lolz… good excuse KY
RM50 is per card or per person?
Easily now most of us have more than 5 cards just for some of the benefit, ie. enter the airport lounge for free, get more discount, rebate and point from certain store.
It is estimated that government income from card fees will be more than RM400 million that the people will have to fork out from their pockets.
Thanks Najib!
I think the government is not sincere. They are trying to squeeze the money from the poor but enrich the richest. 1% at higher income bracket can enrich high earning individual and enable to make more oversea trips. RM50/= tax can squeeze a poor individual to death and cause them to lose many meals in a year who has to borrow to survive on credit card. Rich people like Najib would never live to know that. He is sitting in the office and think about “pluck from the air” revenue recovery strategy. One Malaysia = Want Poor Malaysian Money.
What a “wise” decision made by the government. People stop using credit cards means reduce spending. So, will it affect the economy? The answer is YES!
Conclusion:
Government = EARN
People = LOSE
Economy = LOSE
Malaysia boleh!
i have more than 5 cards and no outstanding balance. Having more cards gives me the flexibility in spending and enjoy rebates, discount promotions and free insurance coverage. Now the government is taking away all this just to prevent those who cant control their spending to overspend?
Really appreciate it!
Good thing I only have ONE card.
This is a desperate act by the gomen. They are in dire need of cash to fund their (politicians) spendings.
The question is not how much tax money is being spent on nation building, but how much of these money really goes into nation building?
Sigh! Malaysia is now getting “poorer”?
Imposing service tax Rm50-00 per credit card just like squeezing money from Rakyat. Imaging each credit card holder having more than 1 cards with them, government will generate revenue more than RM55 million (11 million x Rm50) a year with effect from 1st Jan 2010.
Banks are planning to absorb these service tax?
If banks were to do so, indirectly “government” is “robbing the bank” …. haha!
Right On!
Like what we did! Just Cut It!
Stoopid Gormen!
Before considering about the tax they should think about the public. Because they are the one who is going to get either benefits or suffer from the government…