KOTA KINABALU – Putrajaya’s proposal to raise the sales and services tax (SST) and remove diesel fuel subsidy will further burden Sabahans, said Warisan vice-president Datuk Junz Wong.
He said the move is already causing concern among the people in the state, where cost of living is already high and will go higher if they were imposed while many people are still living under the poverty line.
“Sabah potentially will experience an obvious increase in the cost of doing business and living between 20% and 30% if the federal government decides to increase the SST and remove the diesel subsidy,” he said in a statement here today.
The government has proposed to raise the SST from 6% to 8% and also remove the diesel subsidy in Budget 2024.
“I would like to appeal to the federal government to have more empathy for the people in Sabah and fully understand the situation in the state.
“Try and put yourself in our shoes and understand the difficulties faced by the people in Sabah,” he said.
The Tanjung Aru assemblyman said the obvious increase in the SST hike would be on the cost of logistics of distributing goods in the state while the removal of diesel will impact many who are using four-wheel vehicles.
He said diesel fuelled vehicles in the state is a necessity due to the bad road conditions and hilly Sabah terrains.
Thus, the removal of its subsidy will definitely impact the cost of transportation further.
Wong proposed Sabah to be excluded from the 8% SST implementation and urged the federal government to study the impact when attempting to introduce similar moves in the future.
He also suggested that the move be implemented in stages as opposed to immediate implementation such as only imposing a lower rate for services under RM3 million and higher to larger businesses, saying that this could avert a widespread rise in the cost of goods.
Prime Minister Datuk Seri Anwar Ibrahim had said that the SST move is among a number of taxation reform measures to be implemented next year to expand the country’s revenue base and at the same time not burden the majority of the people.
Anwar, also the finance minister, said the government plans to increase the service tax rate to 8.0% instead of 6.0%. This does not include services such as food, beverages, or telecommunications.
“The government will also expand the scope of taxable services to include logistic services, brokerage, underwriting and karaoke,” he said when presenting Budget 2024 in the Dewan Rakyat on October 13. – The Vibes, October 24, 2023
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