Minister: GST has to be fine-tuned to match provisions in Constitution

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

Updated: Thursday January 30, 2014 MYT 9:41:01 AM

KUCHING: The implementation of the Goods and Services Tax (GST) in Sarawak has to be fine-tuned to match the provisions in the Constitution, which allows the state government to collect service tax or sales tax of products and services produced in the state.

“The collection of tax is in the jurisdiction of the state government,” said Housing Minister Datuk Amar Abang Johari Tun Openg during the closing of an economic seminar here yesterday.

Conventionally, a state is not allowed to have double taxation implemented. Although the state government does not have boundaries to adopt the system of GST that has been organised by the Federal Government, it wishes to further discuss the fine-tuning of the mechanics of tax collection so that the state government does not lose the existing proceedings.

“It is expedient therefore that with the good intention of the Government to broaden our revenue base, it is also pertinent that the state is bound to safeguard its financial autonomy arising from the implementation of GST,” said Johari.

In order to boost economic growth in Malaysia, the GST will be implemented by the Government starting April 1 next year.

Economic growth in Sarawak has seen a rise of 4.5% last year due to the increase of investments by the public and private sectors through development projects under Sarawak Corridor of Renewable Energy (SCORE) and Tenth Malaysia Plan (10MP).

“In 2014, Sarawak’s economy is expected to increase at a rate of 5.0%. This increment is driven by domestic demands of 9.4% and the increase of exportation at a rate of 9.3%.

“This performance will be supported by private sector investments of 18.2% which is consistent with the robust domestic economy and prospective global economy. It will increase private and public expenditures that is predicted to grow at a rate of 9.4% and 5%,” Johari stated.

“The construction sector is expected to rise as much as 10.8% this year especially in SCORE areas that involves both private and public sectors like Samalaju Port, infrastructure and utility projects or factories at Samalaju Industrial Park, water supply projects and infrastructure in Tanjung Manis Halal Hub and Murum hydroelectric dam. Private sectors will hopefully rise by 5.7% to cater to domestic demands and manufacturing sector at 5.4%.”

Since its launch on Feb 11, 2008, SCORE has approved 25 projects in its area that involves an investment of RM37.4bil and offered 18,000 job opportunities to the public.