Malaysian Consumers To Have Alternative Means To Pay Card Tax

Issuers in Malaysia can enter into alternative arrangements with their cardholders for the payment of the credit card service tax that goes into effect on Jan. 1, a spokesperson from the Association of Banks in Malaysia, a trade group, tells PaymentsSource. Banks may enable cardholders to pay taxes via rewards points and cash-back rebates, the spokesperson says. Banks earlier had said they intended to charge customers for the tax instead of absorbing the costs. Earlier this year, the Malaysian government announced that a service tax of 50 ringgits (US$15 and 10 Euros) a year would be imposed on each primary credit card and 25 ringgits a year on each supplementary card. The association spokesperson says that debit cards, gasoline cards and private-label cards are not subject to the tax. “The tax would be collected by banks and other card issuers from credit or charge card holders and paid to the customs and excise director-general,” the spokesperson says.