Colin Charles Agenda

Dear current ruling government of Malaysia,

I see you’ve decided that it would be wise to charge a RM50/year credit card tax, on a per card basis, while charging the supplementary users RM25/year. Your opposition says that you will thus make RM400 million a year in revenue, just from these fees alone.

Some are however convinced, that though you slap a tax on us credit card users, most banks will probably absorb the charges to hold on to customers. But you don’t like it, because the tax, is meant to promote prudent spending.

Now, let me tell you my opinion, as a person who liberally uses his credit card for every purchase he can use it for, because he’s kiasu to get rewards points. To boot, I also settle all my bills on time, in full. And I also have business interests, in where credit card transactions are crucial. </disclosures>

First up, the rakyat aren’t stupid. Please do not think you’re smarter than them. Telling the rakyat for example, that the EPF is the be all and end all, is just silly. Telling them that they need at most “two cards”, is no better, my friend.

Promoting the online economy
Limiting credit card transactions, harm the economy. As more and more people are getting broadband Internet access, more and more people are choosing to purchase online. Today, you can buy air tickets, groceries, cameras, services and clothes online, all thanks to a credit card. By imposing a fee, you are potentially harming the online economy, and this is not in tandem with the MSC, at all.

Discounts galore
Credit card companies like to reward their cardholders. HSBC for example, regularly rewards you in the MidValley and Gardens shopping malls. CIMB is currently rewarding shoppers at Pavillion. American Express regularly has some dining places on its rewards list. These lists go on for many banks, including Citibank, UOB, etc. These are 10-20% discounts, which mean a lot to the average Malaysian.

This encourages you to carry more than one credit card. If I may be allowed to put on my kiasu hat again, I’d like to say, this is exactly what I do. I patronise places, where I know I can get a discount. Or where I know, that if I spend RM50 on food, I get a free dessert valued at RM15. I want my ringgit to go further, and I’m sure the rest of my Malaysian friends do, too. Today, I almost always exclusively buy coffee at Starbucks with a credit card, because everything I sign off, is 10% cheaper.

No fees
Credit card companies like Citibank tell me that they’d like to slap me with an RM600 yearly fee for my credit card. I got off a plane, and at about 2.30am, I called their call centre, and told them I’d like a waiver. They did just that. Do you honestly think they’d like to charge me RM50, when they’d just waived RM600?

HSBC tells me I get my Visa Platinum and Gold MasterCard, free for life. I have a hefty limit on the Visa Platinum, and almost never use the Gold MasterCard (not many places today only accept MasterCard, thankfully). Do you think I will be cancelling it if I’m slapped with an RM50 fee for something I almost never use?

Public Bank likes to give me credit cards that are free too. To boot, they give me a 0.7% rebate for every ringgit spent. Now, remember, I am kiasu, and I like seeing my rebates. Would you honestly think I want to spend RM50 of it, on fees? (make that RM100/year, for both Visa and MasterCard).

Quick math tells me that I’ll have to spend nearly RM15,000 just to get my cash back, to pay the government.

Incidentally, a lot of banks throw credit cards against those that hold a loan at their bank. They are free of fees. Should they also now be slapped with an RM50 fee?

Electronic transactions are safer
I lived in Australia for many years. There, you can pay for everything, from a 5-dollar latte to a 100-dollar taxi ride, using your bank card, via EFTPOS (Electronic Funds Transfer at Point Of Sale). There are lofty goals with MEPS in Malaysia, but its just not widely used.

However, credit cards are widely used and available. No, I still can’t pay for a taxi ride, and we’re very far behind in comparison to Australia, or our little neighbour down south, Singapore, but at least, we’re getting there.

Charging fees will probably hamper the use of electronic transactions. I have a dream, that when I go to a mamak stall, and order myself a roti telur (double telur!), and a teh tarik, I can use my credit (or debit) card, and pay for it.

Malaysia has always aimed to be a modern society, and if we can go cashless, we’ll be safer. Crime in Malaysia is already so high, and the last thing we need, is further encouragement from the government, for people to deal in cash transactions. The more we can move to electronic transactions, the better.

Donning my business hat
Today, the average Malaysian probably buys a lot of things on these wonderful “easy payment schemes”. You take the item home, and pay for it, with 0% interest, over a period of 12-24 months. This is how people get a snazzy television, a new laptop, or a massage chair. Having less credit cards in circulation, means people potentially buy less stuff. Are you not hampering the economy, this way, as well?

One more thing…
As a frequent traveller, I can for one tell you, that the Malaysian Ringgit, is not worth very much. 1 Euro is about RM5, and 1 USD is about RM3.50. Visiting Australia, sets it at 1 AUD being about RM3, while just going down south to Singapore, 1 SGD is about RM2.50. We had a 1:1 currency with Singapore, not long ago, but this “basket peg”, has really undervalued our currency.

Travellers need more credit cards, plain and simple. What are the other options? Carry a boat load of cash, and lose it at a tourist spot? Travellers cheques, are going out of fashion, like you wouldn’t believe. And the glorious Malaysian ATM cards stop working from midnight-6am Malaysian time (yes, you have to time your withdrawals overseas). And that 6-digit PIN number, tends to not work, in countries where PINs are 4-digits long.

In conclusion
Don’t assume the rakyat to be dumb. They can plan for themselves.

Start an advertising campaign. A Flickr user, Liyin, can help. That image is off to a good start (not CC licensed unfortunately).

Don’t assume the lenders (banks) to be dumb, either. This isn’t America, and the banking regulations are a lot stricter. Credit cards usually give you a 2-3x salary limit. They ask for papers (salary slips). The banks know how much debt you can handle. Wouldn’t it be better to impose on banks to say, “no to 3x salary, but 2x salary”?

I want to see online transactions take off. And the solution is not online bank transfers (RM2 GIRO fee applies). Its credit cards.

Please don’t hurt the rakyat from spending.

Photo credit: LiewCF on Flickr.

Piracy is a big deal in Malaysia. Apparently, piracy is causing greater losses for the software industry, and is a billion ringgit problem. The piracy rate is 59%, which is below the regional average of 61%. Wow!

The Business Software Alliance (BSA) hates piracy. They’ve even setup an informative site, titled B4USurf. Its great to see that they run Apache, on CentOS, and are powered by PHP and CMS Made Simple. They however, don’t at any point in time mention opensource in all their information. Of course I understand why – the BSA themselves shouldn’t like opensource.

However, the Domestic Trade and Consumer Affairs Ministry plans to increase public awareness to buying only original software. They’ll also touch on the downside of pirated products. Will they then not talk about opensource software?

Its all fine and dandy to create an open source conference for advocacy purposes, but if we’re still doing advocacy after so many years, something must be amiss. Maybe enlisting help from other ministries, tacking on information campaigns organised by the Domestic Trade and Consumer Affairs Ministry might make sense, no?

Seeing ads that tell you to buy original software, just falls on deaf ears. Show them alternatives. Show them that there is no need to buy original software, after all, open source software is free (as in bebas, not necessarily percuma).

When I was in Bangkok, Thailand recently, I received really good information from John Berns, one of the organisers of BarCampBangkok3. He told all out-of-town guests, that you have options for data, with regards to phone SIMs (which you can procure for less than 100 Baht, and topups range from 50, 100 and 300 Baht – cheap!):

If you want to get EDGE/GPRS data service, buy a One-2-Call SIM, it’s easy to set up and you can get 20 hours of EDGE/GPRS for B100. To subscribe, just dial *138 and follow the voice menu.

In Malaysia, prepaid broadband is not simple. Until now, it seems. I quote, from the article Driving mobile broadband to tourists:

Celcom Broadband Prepaid plans are available for RM20 for a week’s worth of unlimited Internet connections while RM6 will buy you 24 hours of unlimited connectivity. The connection speed is up to a maximum of 384 kilobits per second.

RM20 for a week’s worth of unlimited Internet access, that gives you 384kbps. That’s cheap! For a month, that is a meagre RM80, much cheaper than Maxis’s Broadband offering (albeit at a higher speed, but the service quality is horrendous) at RM138.

How is Celcom Broadband? Does it work well? It seems like they’re about the only provider that I have not subscribed to, and this prepaid deal is making me want to check it out. (Their website on the other hand is a complete useless hunk of Flash, that even MacOSX dislikes.)

Point to note: in Thailand, getting a SIM card is easy, you just buy it off the shelf. In Malaysia, they require ID checks, and an address (I’m sure a hotel’s would suffice, and a passport would do), as they need to add it to a centralised database, to track your naughty behaviour ;-)

The last time I was in Singapore, I also noticed something similar from M1: M1 Prepaid Broadband. 3 days of usage, up to 7.2mbps, and topup’s are SGD$18 for 3 days, and SGD$30 for 5 days. The card itself costs SGD$18. Very nifty (there was a promo for a little over a hundred bucks, you could even pick up an unlocked HSDPA modem!). Where else can I get prepaid broadband, on the cheap?

You own a modern phone? You own an iPhone? You definitely want something like this, considering you’ll find the location based services useful, as well as making use of the assisted GPS unit to find your way around. Looks like Thailand, Malaysia and Singapore have their bases covered for the mobile data warrior.

Apparently, the whole idea behind registering bloggers is coming back. The esteemed Information, Communications and Culture Minister, Rais Yatim stated:

“The idea is good, but we have to see it from the legal aspects and from the aspect of freedom of Internet use.”

What is this? A world of X-Men, where there are mutant registrations, in where the special powers are that of questioning the current administration and providing a more balanced (or biased) view of the political scene? Ptff.

Curious I am, about the Multimedia Signature Act. I don’t think anyone in their right minds, is interested in registering the fact that they write a blog. But its great to see the threat of bloggers so mainstream, that they’ve been talking about registration for at least two years.

The good news – the website to track economic stimulus funds in Malaysia is now ready. Check out: Rangsangan Ekonomi Malaysia.

Even better news, they used an open source software solution (Joomla!) to make that website happen. So mad props go out to them.

Only thing that irks me? Its all in Bahasa Malaysia, with no translation in English.

Executive summary: If you make a mistake in your e-filing for taxes, you have to print out the tax form, submit supporting documents, write a cover letter, and send it over to the tax office, anytime after the tax madness of pre-April 30, is over. Read on, for the tale.

So, if you’ve been following my tweets, you know I’ve been a little under the weather lately. Plus I just flew back from San Francisco. No, I do not have swine flu, its just sinuses acting up. Nonetheless, the government of Malaysia’s, Inland Revenue Board (LHDN/Hasil/tax office) doesn’t believe in excuses, and had set an April 30 deadline (showing them my passport, I doubt would have been any help).

Much like Suanie, this is my first year of filing taxes. I thought I’ll try the e-Hasil method, which is basically e-filing, right in your web browser.

First up, the system is available in English. OK, the content is mostly available in English (its filled with Bahasa Malaysia at the top, with the English text, in small print), and the buttons are all in Bahasa Malaysia, but you can guess what needs to be done.

Getting my e-filing PIN was easy. I just went to a very crowded LHDN office, and asked the nice lady over the counter. I’m surprised she engaged with me, entirely in English, without any complaint. I got my Tax ID, my e-filing PIN number, and some instructions.

Upon going home, I attempted to get it all working. Its pretty easy, if you can get connected to the site (I ended up tunnelling my traffic – and Gareth warns that the servers do crash). It really did take less than 15 minutes. I just input my salary, how much I could deduct (charity, books, and medication for parents — who knew sporting equipment counted too? Time to buy some this year.)

And then, the next day, I realise I had made a boo boo. I had not input the maximum deduction for EPF. Why? Because the software didn’t translate it properly, and it did only say “KWSP”, not “EPF”. So there’s a RM6,000 deduction, making my taxes not seem in order (in a way that benefits me, might I add — this should add to my refund).

The site, is all written in ASP. There definitely are some checks, via JavaScript in some fields. It works fine using Firefox on Windows, Mac OS X, and Linux (I got to test it all — my parents too, decided to go the e-filing route this year).

Now, noting that there is already some JavaScript, why not, at the field which asks you about EPF (or KWSP as they put it), there be an alert? After all, if you’re paying taxes, you’re definitely paying for contributions to your retirement, to the EPF/KWSP.

To make matters worse, once you’ve submitted the form online, and “signed” it, you can’t amend it. I called up the Shah Alam office (because all other numbers went to hell), at 03-55103202, to ask for help. I must shout out to Twitter user, @derekw who had already emailed the tax office before with regards to a similar question. His email to me, was really useful.

I got transferred three times before I got to someone that spoke English to me. His instructions were simple: write a cover letter, state your case, attach the print out of the tax return, plus attach the document(s) required to support your claim. In my case, the nice bloke told me to just write the cover letter, and attach my EA form, which comes from my employer. And he said, don’t bother doing it now, just do it anytime next week (or later, even), since the offices are all too crowded now.

So, that’s been my tax tale. How can all this be improved? What’s good, what’s bad?

• Good: it works with Firefox. It also seems to be cross-platform. It could be worse — like some Windows based software, that will make you vomit
• Bad: its written in ASP, and uses Microsoft technology (Windows 2000, IIS 5). Spending money of the rakyat should be wiser, and using proprietary software, is bad.
• Bad: servers need to scale. Failing, or being slow, under traffic, is just unacceptable. You don’t need “extra” machines, so maybe some form of scale-to-cloud, during peak season.
• Bad: there are some checks now, with JavaScript, but there should be more checks on mandatory things (case in point, my EPF problem)
• Good: Its bi-lingual.
• Bad: the English interface needs improvement. Buttons need to be translated properly
• Bad: editing your tax returns, should be available, till the deadline, in the respective year
• Good: PDF’s are generated of your receipt, as well as your tax form

Again, thanks to the Twitterverse being helpful: @ShaolinTiger, @derekw, @kamal, and @mikefoong. In other news, I can heartily recommend you read: Why should we pay income tax to the BN? and the running commentary there, as well as on Suanie’s post.