KUCHING, Feb 1: Democratic Action Party (DAP) Sarawak calls on the Sarawak government not to impose the State Sales Tax on tyres, be it five per cent or the reduced 2.5 per cent.
DAP Sarawak chief Chong Chieng Jen explained that at present, tyres are subject to five per cent Federal Sales Tax throughout the whole country. For tyres imported from countries outside ASEAN, an additional five per cent Import Duty is imposed.
On top of the federal tax, the Sarawak state government has the autonomy to impose the State’s Sales Tax in addition to the Federal Sales Tax and Import Duty, Chong said.
Citing the example of the purchase of lottery tickets, Chong said the punters in Sarawak are paying an additional 10 per cent Sales Tax to the state government, making the lottery tickets in Sarawak 10 per cent more expensive than those sold in Peninsular Malaysia.
The Kota Sentosa assemblyman said for the imposition of State Sales Tax on tyres sold in Sarawak, the state government previously proposed to impose five per cent State Sales Tax with effect from Jan 1, 2020 but was delayed because of strong objection from the business sector and the economic recession caused by the Covid-19 pandemic. Therefore, the five per cent State Sales Tax was not implemented.
At the end of last year, the state government proposed to impose a 2.5 per cent State Sales Tax on tyres and the state government’s directive for the imposition of such tax with effect from Jan 4, 2021 was also issued to all relevant stakeholders.
“To the business sector and consumers in Sarawak, if this 2.5 per cent State Sales Tax were to be implemented, prices of all tyres in Sarawak will increase by 2.5 per cent, not a reduction in tyre prices as portrayed earlier by certain news reporting. It is effectively an imposition State Sales Tax from zero per cent to 2.5 per cent.
“Tyres are essential to all transportation people and goods. With the imposition of this 2.5 per cent State Sales Tax, it will definitely exacerbate inflation and burden the people. As such, the state government should not put additional costs to business and consumers, especially during this time of economic hardship.
“I thus call upon the government to refrain from implementing the State Sales Tax on tyres so as not to unnecessarily burden the people,” said Chong who is also Stampin MP. — DayakDaily