By Beh Kay Hieng
SHAH ALAM: The whiff in the city’s shopping malls smack of credit cards. To the upwardly mobile graduate, credit cards are a lifestyle necessity.
To a family the card means emergency funds and to the businessman its offers instant no-collateral loans.
These days credit cards are a way of life and survival is one seemingly endless cycle of mortages and debts.
Come Jan 1, 2010, these “survivors” will plunge further into debt as the Government moves to rake in a few hundred million ringgit from some 11 million credit card users in the country. All in the name of diversifying their revenue base away from state oil company Petronas.
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said that new and existing credit and charge card holders will have to pay the RM50 service tax. For a supplementary card, the charge is RM25.
According to Petaling Jaya MP Tony Pua, this should work out to RM520 million in additional tax revenue.
And this is the prelude to the soon-to-be introduced 4% good and service tax (GST). If you are planning to charge a product on your card, be prepared to pay more in 2011. Most merchants already charge a 2% fee to cover bank charges. That means the card holder will be paying 6% more on goods purchased.
Mind you, all this is not inclusive of other charges imposed by banks.
The new 4% GST is expected to raise RM1 billion a year more than RM7.8 billion ringgit projected earnings for 2010 from the existing service tax.
“The tax will reduce the fiscal deficit and will not burden the people and businesses,” Ahmad Husni told reporters recently.
But the Consumer Association of Penang disagrees. It is against indiscriminate taxes and credit card charges.
Malaysians, it says, pay for everything.
CAP President Haji S.M Mohamed Idris believes that cards are too
accessible these days.
“It encourages consumption and there are various hidden costs involved
in the use of credit cards,” he said.
“Banks make money from the consumer’s indebtedness, and government taxes aid this process. They (banks) don’t want a customer who pays everything up front. In the end the consumers suffer,” he said.
SHAH ALAM: The whiff in the city’s shopping malls smack of credit cards. To the upwardly mobile graduate, credit cards are a lifestyle necessity.
To a family the card means emergency funds and to the businessman its offers instant no-collateral loans.
These days credit cards are a way of life and survival is one seemingly endless cycle of mortages and debts.
Come Jan 1, 2010, these “survivors” will plunge further into debt as the Government moves to rake in a few hundred million ringgit from some 11 million credit card users in the country. All in the name of diversifying their revenue base away from state oil company Petronas.
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said that new and existing credit and charge card holders will have to pay the RM50 service tax. For a supplementary card, the charge is RM25.
According to Petaling Jaya MP Tony Pua, this should work out to RM520 million in additional tax revenue.
And this is the prelude to the soon-to-be introduced 4% good and service tax (GST). If you are planning to charge a product on your card, be prepared to pay more in 2011. Most merchants already charge a 2% fee to cover bank charges. That means the card holder will be paying 6% more on goods purchased.
Mind you, all this is not inclusive of other charges imposed by banks.
The new 4% GST is expected to raise RM1 billion a year more than RM7.8 billion ringgit projected earnings for 2010 from the existing service tax.
“The tax will reduce the fiscal deficit and will not burden the people and businesses,” Ahmad Husni told reporters recently.
But the Consumer Association of Penang disagrees. It is against indiscriminate taxes and credit card charges.
Malaysians, it says, pay for everything.
CAP President Haji S.M Mohamed Idris believes that cards are too
accessible these days.
“It encourages consumption and there are various hidden costs involved
in the use of credit cards,” he said.
“Banks make money from the consumer’s indebtedness, and government taxes aid this process. They (banks) don’t want a customer who pays everything up front. In the end the consumers suffer,” he said.
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