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KUCHING, Dec 5: Padungan assemblyman Chong Chieng Jen has written to Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg in a final attempt to get the State Sales Tax (SST) on tyres repealed.
This follows Chong’s numerous unsuccessful attempts on behalf of tyre dealers to persuade the Sarawak government to cancel the imposition of the SST on tyres.
According to an official letter addressed by Chong to Abang Johari regarding the appeal for an SST waiver on imported tyres, Chong stated that tyre dealers were informed that the SST would be increased to 5 per cent beginning Jan 2023.
“I have met up with some tyre dealers on the imposition of the SST on imported tyres.
“I was informed that the SST was fixed at 5 per cent with effect from Jan 1, 2020, and then reduced to 2.5 per cent with effect from Jan 2021 to Dec 2022.
“The tyre dealers were informed that the SST will be revised upwards to 5 per cent with effect from Jan 2023,” he highlighted.
He said that despite the SST being introduced on Jan 1, 2020, it was not widely publicised, and most tyre dealers did not register with the State Treasury Department due to the Covid-19 pandemic.
“Recently, officers from the State Treasury Department approached some tyre dealers and asked them to register with the Comptroller in order for the State Treasury Department to assess the SST payable by them dating back to Jan 1, 2020,” he added.
In addition, Chong listed out the reasons for the appeal. He argued that be it 2.5 per cent or 5 per cent, the imposition of SST on imported tyres will make the price of tyres in Sarawak the most expensive in the whole of Malaysia as Sarawak is the first and only State to impose such SST.
He also argued that the imposition of SST will further aggravate the inflation rate and will add further costs to businesses and slow down their recovery. It will also put many tyre dealers out of business and deprive them of the little profits they earned over the years, he added.
Chong, who is also the Stampin MP, stated that during the recent State Legislative Assembly (DUN) sitting, Deputy Premier of Sarawak Datuk Amar Douglas Uggah Embas, explained that the SST revenue collected is used to “defray the expenses of disposing of used tyres throughout the State”.
“Upon further enquiries with some of the industry players, I was informed that the State government has paid an appointed company in the State for going around collecting used tyres and that the SST collected goes to subsidise the collection cost,” he revealed.
He also stated that after speaking with some tyre dealers, the reason for the imposition of SST provided by Uggah is not justifiable.
“First, recycling used tyres can be a profitable business and part of a sustainable economy, but by appointing only one company to do the job and subsidising that company, the government is killing off competition in the tyre-recycling industry and discouraging further innovation. Why should all the tyre dealers and the general consumers be forced to pay the SST which goes to that one company?
“Second, if the government truly believes in the concept of recycling used tyres, it should be more open to issuing licences and permits to anyone who wishes to enter the business. Government assistance should be extended to all industry participants, not just a select few.
“Third, to justify the imposition of SST on this ground, the government must be transparent on the costs and subsidy paid to the licensed company,” he asserted.
“Fourth, any government assistance for collecting used tyres and helping in the recycling of used tyres may be given without the imposition of SST.
“Fifth, by the estimation of the tyre dealers, if properly managed, the costs of collecting used tyres should not be as high as 5 per cent of the price of the tyres.”
Furthermore, Chong who is also the Sarawak Democratic Action Party (DAP) chairman asserted that if the government is adamant about implementing the SST, it should be postponed for three years to give tyre dealers and general consumers a three-year breathing space following the Covid-19 pandemic. — DayakDaily