Short note: Please bear in mind that this is only an opinion that comes from my logical analysis and projection. Hence, an oversight in my argument should be expected. Also, please be reminded that this posts is solely for the best of the country as it will promote discussion and thinking among the public as well as readers. Any opinion in relation to this topic is encouraged. However, please bear in mind that hostile and rude comments on any party for discussion shall be removed. Hence, please word your comments in an ethical and professional manner.
Here are some posts in relation to the credit card tax.
Banks await guidelines on credit card tax
Credit card agents cry foul over service charge plan
Service tax on credit cards raises concerns
First, let me begin by quantifying the amount of money collected by the government assuming that there are no credit card cancellation: (9.8 million principal cards x RM50) + (1.3 million supplementary cards x RM25) = RM522.5 million. Now assuming that the net effect of new subscribers and cancellation resulting in 20% drop in number of principal cards, the collection by the government is RM424.5 million. With this sum of money, I do agree on a point that the government needs money to run the country. However, with recent astounding revelation on how our money is not being wisely used, I doubt that our additional tax contribution would be utilized effectively too. As a taxpayer, I was utterly disappointed and disgusted with that particular revelation. The government should prove themselves worthy of handling our fund first before they start to come up with laws to deter us on how to spend our money prudently.
The government should prove to the public first that they are utilizing our tax money in achieving 3Es (Effectiveness, Efficiency & Economical) as it will be used as a performance evaluation tool on the capability of the government. If the government are not spending our money wisely (Economical), then why are we being penalised first for not being to use our money prudently? Also, will the objective of promoting prudent spending among the public achievable (Effectiveness of the policy)? Even the banks, raises their eyebrow on the achievability of the principal objective outlined by the Prime Minister.
Secondly, does the government know that it will affect public spending? Imagine this: 1) No credit card (loan) => no expenses => lower revenue to sellers => retrenchment and unemployment => poverty & higher crime rate. Also, 2) No credit card (loan) => no expenses => lower revenue to sellers => lower tax collection to run the country.
Thirdly, with high number of unemployment, public would be targeted more often as they would held more cash in their pocket. Is our law enforcement ready to handle the surge in crime rate? Would they be openly and actively searching for muggers? Also, if they are caught and thrown into jail, aren’t them to be more likely to be using our public funds? We have to pay for their meals, right? Imagine RM5 per day for three meals for an inmate would cost RM1,825 per year. I’m sure the inmates would be happily sit in jail rather than begging on the streets. Also, higher number of inmates would result in overcrowding of jails and new facilities have to be built. How much would that cost? RM200 million to RM300 million?
Fourth, SMEs are the one that would be badly hit. They do not have the resources to maintain a high number of employees. Also, they would most likely to be borrowing money from banks to finance their operations. If they are unable to generate cash, they would be the ones that goes bust. Then, the Ah Longs would come to the rescue (since they would having poor credit rating due to inability to finance their loan).
Well, that’s all for now, if any of you have any constructive arguments in favour or against the credit card tax, don’t be shy to leave a comment. Again, I would like to stress out that it should be worded in an ethical and professional manner.
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