[IMGCAP(1)]

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. Details about how the tax would be implemented and paid were not immediately available. The government hopes the tax persuades consumers to reduce the number of credit cards they carry. Bank Negara Malaysia, the country's central bank, said consumers in Malaysia hold some 11 million credit cards. Without more details about the policy, it is too early to say how the tax will affect card use, Charles Sik, head of consumer financial services for OCBC Bank (Malaysia) Bhd., tells CardLine Global. "Much would depend on how this is implemented," Sik says. "In any case, the consumer or the banking industry would have to bear the cost for this new source of income for the government."

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry