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Tuesday, February 11, 2014

‘Exemption of GST in Sabah ‘non-negotiable’

Posted on February 11, 2014, Tuesday

KOTA KINABALU: The support for the introduction of Goods and Services Tax (GST) in Sabah needs to be ‘re-examined’ by the Sabahan government leaders.

State Reform Party (Star) Sabah chief Datuk Dr Jeffrey Kitingan made this call in response to Sabah Chief Minister Datuk Seri Musa Aman’s statement that the government is supporting the implementation of GST in Sabah.

“The Sabah government leaders need to have their heads examined for wrongly supporting the implementation of GST in Sabah without considering the rights of Sabah and the welfare of Sabahans,” he said according to a press statement released yesterday.

“The best formula for Sabah and Sabahans is still the exemption of GST in Sabah. By right, this should be the only and ‘non-negotiable’ option to be adopted by the Sabah government if they are genuinely looking after the interests of Sabah and Sabahans,” said Jeffrey, who is also Bingkor assemblyman.

Jeffrey pointed out that it was agreed during the formation of Malaysia in 1963 that Sabah will have control of its own finances, tariffs and development funds.

“Point No 11 of the 20-Point Agreement states that North Borneo (Sabah) should have control of its own finance, development funds and tariffs.

“The sovereign right to impose sales tax was subsequently incorporated in Article 95B (3) of the Federal Constitution, and it is deemed to be a matter under the State List under the 9th Schedule and not under the Federal List,” Jeffrey said.

Article 95B(3) of the Federal Constitution states: “The Legislature of the State of Sabah or Sarawak may also make laws for imposing sales tax, and any sales tax imposed by State law in the State of Sabah and Sarawak shall be deemed to be among the matters enumerated in the State List and not in the Federal List; but (a) There shall not in the charging or administration of a State sales tax be discrimination between the goods of the same description according to the place in which they originate; and (b) The charge for any federal sales tax shall be met out of sums collected from a person liable for that tax before the charge for a State sales tax.

“There are no two ways about it. Sabah government needs to work towards a plan to secure exemption of GST in Sabah.

“Sabahans are already the poorest in Malaysia. The Sabah government needs to take every action to safeguard the interests of Sabahans, who are not ready for GST, and Sabah has the sovereign right to collect sales tax in Sabah and should not abrogate or sub-contract this right.

“As it is, Sabahans are losing more than RM40 billion in revenue annually to the federal government and Petronas,” Jeffrey said, adding that if the federal government still wished to impose GST in Sabah then there would be no option but to take the federal government to court and declare GST as unconstitutional.

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