28 January 2010

FAQs on Credit Card Service Tax

This FAQ was provided by UOB and I share it to help clear some of the common questions that most of us should/would want to know.

What is this Credit Card Annual Service Tax?
In the 2010 Budget announcement , the Government proposed to impose an annual
Service Tax of RM50 for all Principal Credit Cards & Charge Cards and RM25 for
Supplementary Cards effective 1 January 2010. The objective of this proposal is to
promote prudent spending to all Credit Cards and Charge Cards users.


Will I be charged for this Service Tax?
The Service Tax is applicable to all Malaysian Credit Cards after 1 January 2010.


Can UOB waive this Service Tax?
Since this is a Government Service Tax, banks are not allowed to waive it. However,
cardmembers are encouraged to use their UNIRinggit Rewards Points or Smart$
Cash Rebates to pay for the Service Tax.


I have 2 Cards. Will I be charged twice for this fee? Per card or per customer?
The 2010 Budget proposed imposition of an annual Service Tax of RM50 per
Principal Card and RM25 for every Supplementary Card.


I am currently being charged annual fee. Will I also be charged for this fee?
The Service Tax is a fee imposed by the Government while the Annual Fee is
charged by the bank.


I have a cancelled card with outstanding balance. Will I still be charged for the Service Tax?
No, UOB will not charge you with the Service Tax when your cancelled card with
outstanding balance crosses into the next card anniversary date i.e. when the Service
Tax is due.


How will the Service Tax be imposed? Via card statement or pay to LHDN?
The Service Tax will be debited into your Card Statement and UOB will then forward
the Service Tax to the government.


Is this a confirmed Service Tax or only a proposal by the government?
The Service Tax was proposed in the Budget 2010 and is scheduled to be gazetted
in Parliament before 1 January 2010.

Although the above mentioned is for UOB Credit Card holder but most of it applies to all other banks as well. Using your rebates to pay for the service tax is only applicable to UOB Credit Card and other Credit Card will have to refer to corresponding banks.

To view the original document of the FAQs, please click here
.

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