Bank Islam Malaysia Bhd will not absorb the planned service tax on credit cards that the government will impose next year, the Kuala Lumpur-based bank announced this week. In a statement, the bank said it already has offered other incentives for its credit card customers and does not see the need to absorb the tax. The Malaysian government announced in its 2010 budget it will impose a 50 ringgits (US$15 or 10 Euros) tax on primary credit cards and a 25 ringgits tax on supplementary credit cards. Previously, one other bank, Malayan Banking Bhd, had announced that it, too, will not absorb this tax. That announcement came during the same week the government announced that new credit and charge card holders next year will have to pay the service tax up front. However, existing cardholders will have to pay the tax on the anniversary date of when they received their cards. A survey from local business daily StarBiza also found that such banks as Citibank and RHB Bank were against absorbing the tax. The survey also found that banks are willing to waive annual fees or allow cardholders to use their reward points to pay for the tax.
Authoritative analysis and perspective for every segment of the payments industry
Authoritative analysis and perspective for every segment of the industry
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