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The Association of Banks in Malaysia plans next week to meet with officials from Bank Negara, the country's central bank, to discuss guidelines and concerns related to the recently announced tax on credit cards, an official for the banking trade group tells CardLine Global. The Malaysian government has imposed an "annual service charge" on credit cardholders as part of its 2010 budget. The tax, scheduled to take effect on 1 Jan., amounts to 50 ringgits (US$15 or 9.90 euros) for principal credit and charge cards and 25 ringgits for secondary cards, the government says. The government hopes the tax persuades consumers to reduce the number of credit cards they carry. Lawmakers reportedly have called for banks to absorb the tax so they will be more careful about issuing cards. "The big question here is whether customers will pay the service tax, or can it be absorbed by the issuing banks," says the trade group official, who wishes to remain anonymous. "Certainly for the banks it is a big worry, as some issue up to 12 cards in the market, including cobrand cards with retailers and airlines." According to central bank data, 9.8 million principal and 1.3 million supplementary credit cards are on issue in Malaysia. "You can imagine the quantum of fees the banks will have to pay annually for its customers," the official adds.


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