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Monday, November 25, 2013

Sabah to retain State Sales Tax when GST implemented – Musa

Posted on November 22, 2013, Friday

KOTA KINABALU: Sabah will continue to collect revenues from the State Sales Tax (SST) when the Goods and Services Tax (GST) is implemented in 2015.

Chief Minister Datuk Seri Musa Aman yesterday said the Malaysia Tax Review Panel had informed the state government that GST would not be replacing the SST which is under the jurisdiction of the Sabah and Sarawak governments.

“As such, the state government will continue to collect its revenue like usual because SST is a resource under the jurisdiction of the Sabah and Sarawak governments as stipulated under the Federal Constitution.

“The sales tax which will be replaced by the GST are the ones under the federal level through the Sales Tax Act 1972,” said Musa, who is also the Finance Minister, in his winding-up speech on the last day of the State Assembly sitting.

He was replying to a question from Sri Tanjong assemblyman Chan Foong Hin (DAP) who took part in debating the 2014 State Budget.

The SST is imposed on crude palm oil, slot machines and lotteries.

“Expansion of the SST may burden the people, and this is the concern of the government, so we should be cautious in imposing any new taxes.

“Nevertheless, we are grateful for the concern of the Federal Government for not sidelining the state’s development by channeling billions of ringgit to improve the well-being of the people in the state,” he said.

Touching on the need for the government to issue new bonds in Budget 2014, Musa said the state government could not rely solely on traditional sources of finance as the pricing and commodity production were influenced by the global market and is beyond the control of the State Government.

“Therefore, the planned bond issuance in the 2014 Budget is essential to continue to develop the state,” he said.

On another development, Musa said the people’s interests and state’s progress were the basis taken into consideration when planning for the Sabah State Budget 2014.

“That is why the allocation for the Supply was higher compared to the state’s expenses. But, we believe that what is more vital is to ensure the delivery system is at a high level and efficient so the people would be able to enjoy the progress and well-planned development,” said Musa.

He added that in preparing the state budget, priorities were given to ensure that there is sufficient allocation on operations or recurrent expenditure.

“The recurrent expenditure is very important to ensure the maintenance and operation performed on the government’s service systems that have been developed and made available.

“It is unwise for the government to prepare and develop infrastructure and public facilities, but do not carry out maintenance.

“Under the allocation for the Supply Budget, it also includes provisions for the development of human capital and youth development. The government is giving serious attention to the development of both our human capital and youth as they are the backbone to the development of the present state, and ensure continued prosperity in the future.

“Therefore, there is no need to worry about the reduced spending and the perception that it would hinder the development of the economy as supply expenses also contribute to the state’s economy and bring positive economic chain,” said Musa.

He added that since 2014, that is the end of the 10th Malaysia Plan, the allocation for development was reduced by RM126.05 million or 9.5 per cent compared to this year’s funds.

“Most of the high-scaled projects planned under the 10MP are either completed or in the final stages of completion, thus contributing to the reduced allocation for development projects. Among the projects are the Sandakan Education Hub, Ranau Sports Complex, Kingfisher Bridge, construction of the Riverlock Segaliud Water Treatment Plant and Muka Saur or Water Intake Kasigui, to mention some.

“I would like to reiterate that the federal government has allocated a huge amount of allocation for development of the state over the years, and this has enabled to offset the expenses of the state’s development. This privilege is in return for our good relationship with the federal government.”

He said the RM4.62 billion state budget for next year would ensure better development for the sate and the well-being of the people.

“I hope everyone will play a role to ensure the 2014 State Budget’s objectives are met,” he said.

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