The credit card tax the Malaysian government imposed earlier this year has caused the country’s card base to drop significantly, an official at the country’s central bank tells PaymentsSource.
The central bank has been monitoring the tax’s effect on the country’s card market since the tax was imposed, says the Bank Negara official, who requested anonymity. Effective Jan. 1, the government imposed a 50 ringgits (US$15 or 11 euros) tax on consumers for every primary credit card and a 25 ringgits tax on every supplementary card (
As a result of the tax, the number of credit cards on issue has declined by 19.4%, to 8.7 million as of December 15, 2010 from 10.8 million cards at December 15, 2009, the official says.
“While you can’t attribute the entire drop to the tax, you have to agree that a lot of the decline is because of multiple cardholders returning their extra cards and using just one or two cards,’’ he says.
Credit card companies have used cash-back and reward-point offers to offset the card tax for new and existing cardholders, but the measures were only partially effective, the official says.
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