DAP has urged the government not to impose the proposed RM50 annual service tax on principal credit cards and charge cards as announced in Budgetn 2010.

Penang Chief Minister Lim Guan Eng said that the charges on cards, which are currently issued free-of-charge, only added on to the burden of the lower income group.

"If the government wants to prevent people, especially those from the lower income group, from borrowing from 'loan sharks', then the government must cancel the proposed service tax," he said.

NONE "We received complaints, especially from those in the lower income group and the banks as it affect their businesses... if this amount of money is absorbed by the banks then the impact will not be felt by the people," said Lim ( right ), who is the Bagan DAP parliamentarian.

"But if this amount of money is to be borne by the consumers, you are taking away this amount from the pockets of Malaysians and those who will be severely affected are the lower income group," he said.

He asked the government to look at the proposal from the perspective of the poor before the move is implemented.

According to him the government will earn RM555 million in revenue from about 10 million credit card and approximately 1.5 million supplementary card holders annually.

The government is expected to gain an additional RM6.3billion in net revenue according to the 2010 Federal Government Revenue for next year, if the tax is imposed.

'Help the lower income group'

He said taking into account the tax changes proposed in the 2010 budget, the government does not need the extra RM555 million from the credit card charges.

"Some families have three to four credit cards to roll their expenses... because the interest charged by the banks are mush lower than the interests charged by loan sharks.

NONE The maximum interest rate charged by the bank is about 18 percent to 15 percent annually which is much less than borrowing from moneylenders, he added.

"So why not cancel the charge and help the lower income group. Our expenses are still the same but our income has decreased.

"Due to the economic slowdown, the bonuses are less," Lim told reporters at a press conference at the Parliament lobby today.

Prime Minister Najib Razak ( left ) had said that consumers should look at the overall benefits offered by the government in the budget and other relief measures offered, such the reduce taxes.

"The move to tax credit card holders will not fulfil the government's aim at prudent spending and expenditure, as public income has gone down while their expenditure rate has not changed.

Federal gov't not sidelining Penang

Meanwhile, the government today denied that it has made Pakatan Rakyat-led states especially Penang the ‘step-child' in the development projects funded from the federal level.

sk devamany According to Deputy Minister in the Prime Minister's Department SK Devamany ( right ), Penang has received 1,056 projects worth RM7.616 billion which are in the midst of implementation.

"The federal government is always committed to implementing development projects nationwide without sidelining the states that are not governed by Barisan Nasional.

"This is in accordance with our slogan, ‘1Malaysia: People's first, performance now," he said response to a question by Penang Chief Minister II P Ramasamy (DAP-Batu Kawan).

p ramasamy However, Ramasamy ( left ) was not convinced and claimed that the government had not implemented 90 percent of projects under Ninth Malaysian Plan in Penang.

"If you compare this with other states (that are governed by BN), it shows that you are not being fair," he said.

Devamany retorted by saying that 90 percent of the projects were either completed or are still being carried out.

"For example, the education ministry has allocated RM495 million and RM530 million from the Higher Education Ministry...this shows that we are not sidelining Penang," he said.