Malaysia: Reprieve for Existing Credit Card Holders

At least there is now some direction from the authorities. A Minister has just announced that only 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 cards.

Second Finance Minister Ahmad Husni Hanadzlah confirmed this yesterday.

“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 Najib an­­nounced the new tax when he unveiled Budget 2010 in October.

There are currently some 11 million credit cards circulating in the country. Obviously these are official data.

There has been so much card surrender since the announcement of this punitive tax that I guessed that perhaps we should accept that only 60% or so of cards are now in circulation.So the government's pipe dream of collecting RM550 million from this tax seems to be "half dead in the water"!