Credit Card Tax Payment Date Confirmed

credit cards

The credit cards tax is to stay & no changes will be done. It is will be according to the budget accouncement last October as it was approved in the parliment recently. Principal credit or charge cards holder have to pay RM50 per card while supplement card holder have to pay RM25 per card.

Starting 2010, new credit card applicants will have to pay the RM50 service tax upfront when they issued with new credit or charge cards.

For existing card holders, the charge will be imposed on the anniversary date of cards. The service tax will be pay through their issuing banks. For example, if the card’s anniversary date is in April, then you pay the tax in starting April 2010 & every subsequent anniversary date.

This clarification was announced by Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah will clear the doubts among the millions of credit card holders in the country. They have been raising queries regarding when they need to pay the tax since Prime Minister Datuk Seri Najib Tun Razak announced the new tax during Budget 2010 announcement last October.

Those holding a string of cards were most eager to know before deciding to cancel some of their accounts.

The service tax will not be imposed on debit cards; petrol cards issued by petrol companies, such as FleetCard and SmartPay; closed-community charge cards used at workplaces, schools and clubs only; loyalty cards such as Bonus Link; and E-money such as Touch ‘n Go.

It will also not be imposed on cards issued to replace lost or spoilt cards or those misused in cases of fraud.

In the event a credit or charge card is upgraded (say, from Classic to Gold) or downgraded (from Gold to Classic), or converted (from Islamic to conventional, or co-branded to generic, or vice versa) or reinstated (say, a cancelled card), the service tax will be imposed on the new cards issued unless the anniversary dates of the previous and new cards are the same.

Now it is clear when we have to pay the tax. As of now no banks not willing to absorbs the tax except that some banks offer card holders to redeem their reward points to pay the tax. However the offer is not attractive enough.

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