GEORGE TOWN: The government’s decision to impose a RM50 service tax on each principal credit and charge card from Jan 1, 2010 and RM25 on each supplementary card has not gone down well with some businessmen.

Manohar Bakhtani, 43, said for businessmen like him, having several credits was a necessary convenience. He operates a successful family business and owns more than 40 credit cards and charge cards, while his wife Resham has at least 12 supplementary cards.

With the government’s new ruling, Manohar said he would have to give up most of the cards and retain three or four at most.

His Sam’s Batik clothing store in Penang Road is popular with locals and tourists alike, and he often travels abroad in the course of his work.

“It is clearly not a good move as it will only inconvenience business people like me with additional charges being incurred,” he told The Edge Financial Daily.

“I will have to pay more than RM2,300 annually on service tax only and it is pointless to do so.

“Most of these cards were given free without even annual fees by the banks, and unless the banks are willing to absorb the service tax charges, customers are not going to be happy and would be reluctant to pay the RM50 service tax for each principal card.

“The banks will be losing out as they are going to face the brunt of the customers’ displeasure with the imposition of the additional tax by the government.”

Manohar said he used the cards mainly for his travels, to pay for petrol, flight tickets, hotel rooms and sometimes business purchases abroad.

He said whenever there were promotions by banks with attractive packages, he would take them up.

Having four wallets, Manohar said some of the cards had even been recalled by the banks as they were not utilised.

“I even keep some credit cards in my travelling pouch, which I only use when I am travelling abroad and now, I seriously will have to give many of these up,” he added.

Prime Minister Datuk Seri Najib Razak said in his Budget 2010 speech that credit cards were used extensively and grew to a staggering 11 million cards (excluding 285,000 charge cards) as at August 2009 from two million credit cards in 1997.