I wonder which idiot in our government came up with the dumb idea of taxing all credit cards in the country. According to the recent budget reading, beginning next year, all credit cards in Malaysia will be taxed RM50 annually regardless. The lame excuse is to help reduce debt by taxing credit cards but I have no idea how taxing credit cards helps reduce debt in any way.
Firstly, the tax is flat across all cards – regardless of whether you hold a platinum, gold or regular card. Then, the tax is flat across all users – regardless of whether you are in debt or otherwise. In fact, those people in debt are going to worst hit. Being unable to settle their debts, they would not be able to cancel their excess cards and will end up incurring even more cost with this crazy tax.
Then, let us talk about the damage to the banks. Everyone knows that banks make a lot of money off these credit cards. With people canceling their cards in droves, banks would lose millions in revenue next year. I doubt that the banks would take this lying down. In fact, my colleagues have already been informed by their banks to hold-off their cancellations first while they try to sort this out with the government.
Anyhow, I seriously hope that my bank decides to absorb any card tax, just like how they absorb the annual fees based on the amount of transactions made on the card. The banks earn between 2%-5% off all my card transactions. I pay almost everything with card these days. So, if they can make enough off my card transactions, they should be able to absorb this tax easily.