Credit card tax - a fair solution
Trying To Make Ends MeetPublished: Nov 2, 2009 10:12 AM | Updated: Nov 2, 2009 10:14 AM
I refer to the Malaysiakini report PM slashes spending in Budget 2010.
I would like to suggest an alternative to the imposition of a flat rate of RM50 per principal credit card and RM25 per supplementary card.
First, the government has to understand one of the main reasons why those in the lower to middle- income groups opt for credit cards.
This is because some employers in the private sector do not pay salaries before or at the end of the month, but drag it out until the mandatory date of the seventh of the following month. Some blatantly ignore the law and take advantage of their workers by paying later if they do pay at all.
Faced with the above situation, unfortunate employees have no choice but to purchase essential groceries, toiletries and household products from the hypermarkets using their credit cards to pay first.
This is because other payments like the rent, utilities bills, bus fares, train tickets, car instalments, house instalments and meals have to be paid on time or on the spot and by cash.
Banks offer credit limits for credit cards based on the cardholder’s income. This means only those who earn a huge monthly income can get a credit limit such as RM50,000 to RM100,000 or even more.
Whereas those in the lower to middle-income groups will get a credit limit of only RM4,000 to RM20,000.
Therefore in order to not burden the poorer citizens, the government impose this credit card tax of RM50 by basing it from say a RM50,000 credit limit on a gradually increasing rate.
For comparison, the average lower to middle-income worker spends only RM1 to RM5 for lunch whereas, those in the higher income groups can afford to have breakfast costing RM30, lunch costing RM30 to over RM100 and dinner costing anything from RM60 to over RM1,000, at posh restaurants and hotels.
Anyone should be able to work out the figures that maybe 0.05% to 5.0% of the credit limit of RM50,000 and above will be only a ‘drop in the ocean’ for these high income earners while RM50 would mean one week’s marketing (at the ‘pasar malam’) money for those in the lower to middle-income groups.
The government whose ‘top brass’ may not understand what it is like to go hungry, as it is something they have never experienced and cannot even feel or imagine. But please do have a heart for those who struggle for their daily existence.
I would like to suggest an alternative to the imposition of a flat rate of RM50 per principal credit card and RM25 per supplementary card.
First, the government has to understand one of the main reasons why those in the lower to middle- income groups opt for credit cards.
This is because some employers in the private sector do not pay salaries before or at the end of the month, but drag it out until the mandatory date of the seventh of the following month. Some blatantly ignore the law and take advantage of their workers by paying later if they do pay at all.
Faced with the above situation, unfortunate employees have no choice but to purchase essential groceries, toiletries and household products from the hypermarkets using their credit cards to pay first.
This is because other payments like the rent, utilities bills, bus fares, train tickets, car instalments, house instalments and meals have to be paid on time or on the spot and by cash.
Banks offer credit limits for credit cards based on the cardholder’s income. This means only those who earn a huge monthly income can get a credit limit such as RM50,000 to RM100,000 or even more.
Whereas those in the lower to middle-income groups will get a credit limit of only RM4,000 to RM20,000.
Therefore in order to not burden the poorer citizens, the government impose this credit card tax of RM50 by basing it from say a RM50,000 credit limit on a gradually increasing rate.
For comparison, the average lower to middle-income worker spends only RM1 to RM5 for lunch whereas, those in the higher income groups can afford to have breakfast costing RM30, lunch costing RM30 to over RM100 and dinner costing anything from RM60 to over RM1,000, at posh restaurants and hotels.
Anyone should be able to work out the figures that maybe 0.05% to 5.0% of the credit limit of RM50,000 and above will be only a ‘drop in the ocean’ for these high income earners while RM50 would mean one week’s marketing (at the ‘pasar malam’) money for those in the lower to middle-income groups.
The government whose ‘top brass’ may not understand what it is like to go hungry, as it is something they have never experienced and cannot even feel or imagine. But please do have a heart for those who struggle for their daily existence.
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