Credit card 50 Tax oh Credit card 50 Tax

Finally abolished, should be good news after 1 April GST.

Credit card holders will have to pay the 6% Goods and Services Tax (GST) on the card’s annual fee, but the RM50 service tax will be dropped. “Some banks may however waive the annual fee upon request,” said Association of Banks in Malaysia executive director, Chuah Mei Lin, “Then in such cases, there will be no GST payable.”

Banking sources explained that the GST on the annual fee might vary from RM53 to RM500, depending on the type of card.

They said that cardholders could use their loyalty points or rebates to offset the 6% tax.

Chuah also made it clear that GST would not be imposed on late payment charges and finance charges. Chuah also dismissed talk that cardholders would have to pay GST each time their card was swiped. “GST is not chargeable when swiping a credit card to make payment,” she said, “For example, if you eat at a restaurant which is registered for GST, and the bill comes to RM50, you will be charged 6% GST on the total bill. So the amount you have to pay would be RM53 (ie RM50 + 6%). If you choose to pay for the bill using your credit/debit card, you will not be charged a further 6% on top of the RM53.” (The Star)