Press Statement by Lim Guan Eng in Georgetown on Sunday, 1^st November 2009: 

The Federal Government should not be earning from the middle and lower income groups RM 555 millions annually from the RM50 and RM 25 service tax on each credit/charge card and supplementary card perpetually 

DAP reiterates its opposition to the BN government’s 2010 Budget proposals to impose the RM 50 and RM25 service tax on each credit/charge card and supplementary card respectively. This credit card service tax proposals would earn the Federal Government RM 555 millions annually which would impact more on the middle and lower income groups.

Prime Minister Dato Seri Utama Najib Tun Razak claimed that the people should look at the overall benefits of the 2010 Budget and not just at the service tax on credit card. The Prime Minister is wrong as the benefits of reducing the maximum tax rate of 27% to 26% and a RM 1,000 increase in tax reliefs from RM 8,000 to RM 9,000 would only benefit the wealthy and upper middle class.

BN leaders should look at the service tax from the perspective of the poor and not from their own comfortable lifestyle! Does BN know how the poor makes ends meet by rolling over their expenses through using credit cards? By increasing the service tax on credit cards, the ones most affected and paying the RM 555 million extra revenue earned from imposing service tax will be on the lower and middle income group.

The 2010 budget is supposed to benefit all Malaysians with tax deductions, tax reliefs and tax benefits. These should have reduced government revenue instead of increasing revenue by RM 6.5 billion. An extra RM 555 million is small compared to the RM 6.5 billion increase in revenue from RM 148.5 billion to RM 154.8 billion for 2010. BN government should abolish the service tax for credit cards to prove its credentials as a people centric government.

*Lim Guan Eng, DAP Secretary-General & Penang Chief Minister; Member of Parliament for Bagan