The imposition of the annual RM50 service tax on credit cards has brought the desired effect, with a 16 per cent drop in card ownership – from 10.8 million at the end of 2009 to 9.1 million in mid-2010, the Dewan Rakyat was told yesterday.
Deputy Finance Minister Datuk Seri Awang Adek Hussein said the drop showed that some holders of the cards did not use them.
Furthermore, the RM25 service tax on each supplementary card had also resulted in many of these card holders returning the cards, he said when replying to a supplementary question from Datuk Baharum Mohamed (BN-Sekijang).
Baharum had wanted to know whether the government intended to revoke the service tax, which was imposed on Jan 1.
Awang Adek said the government had no intention as of now to remove the tax.
Earlier, when replying to the original question from Baharum, Awang Adek said that up to last month, the government had collected RM275.5 million in credit card service tax.
Awang Adek said the service tax on credit and charge cards was imposed for the first time on Jan 1, 1997 and revoked on April 1, 2001.
He said that between Jan 1, 1997 and April 1, 2001, the tax collected amounted to RM464.88 million.
Replying to a supplementary question from Dr Tan Seng Giaw (DAP-Kepong), Awang Adek said the government encouraged the use of debit cards, on which the service tax was not imposed.
— Bernama bp 13/10/10