State and Federal to discuss win-win solution on tax

Published: Thursday January 30, 2014 MYT 12:00:00 AM 

Updated: Thursday January 30, 2014 MYT 9:39:45 AM

KUCHING: Negotiations will be carried out between the state and Federal governments to draft out a win-win solution and mechanism on how best the state government’s own sales and services tax would be implemented once the Goods and Services Tax (GST) is to be implemented in April next year.

Deputy Finance Minister Datuk Ahmad Maslan said according to Article 95B of the Federal Constitution, Sarawak and Sabah had the autonomy to impose their own sales taxes for their revenue.

“The Finance Minister has informed me that a follow-up discussion would be carried out between the state governments of Sarawak and Sabah, and the Federal Government to come up with a mechanism and refine the collection of the taxes.

“Based on Article 95B of the Federal Constitution, Sarawak and Sabah have the autonomy to impose their own sales taxes like for crude palm oil. So when GST is to be implemented, the sales and services tax of the Federal Government will be abolished as we do not want to burden the people.

“The negotiation and discussion would be carried out as soon as possible,” Ahmad told a press conference after the closing ceremony of the Pemerkasaan Ekonomi Nasional (Pena) seminar here yesterday.

Housing and Tourism Minister Datuk Amar Abang Johari Tun Openg said he had earlier proposed for the mechanism not to impose a double transaction for the GST and the state taxes.

He said one of the suggestions would be for the Customs Department, entrusted to collect the GST, to also collect the taxes for the state and the Federal Government would reimburse the state government.

“I hope the mechanism and the implementation would be refined and would be a win-win solution for everyone,” said Johari.

Meanwhile, Ahmad said within this one year before the implementation of GST, his ministry together with the Customs Department would be carrying out a series of awareness talks and seminars at every level throughout the state to clear any confusion.

“Requests for talks and seminars can be sent to the Customs Department by going to the online portal www.customs.gst.gov.my.”