By Shikin Louis
KUCHING, Nov 13: The Sarawak government has been urged to exempt intra-state shipping freight within Sarawak waters from the Sales and Services Tax (SST), citing concerns that the tax imposes duplicate charges on multi-stage shipping.
Bukit Assek assemblyman Joseph Chieng Jin Ek said under the current SST structure, the tax exemption for multi-stage transportation only applies to cases where the shipment remains intact from the loading point to the final destination.
However, if a shipment is partially dismantled mid-route, the SST exemption is no longer applicable.
“Consider, for example, a consignment traveling from Kuching to Sibu and then on to Kapit. If merchants in Sibu open the package and send only half of it to Kapit, the receivers in Kapit will bear the weight of double SST—paying SST from Kuching to Sibu and again from Sibu to Kapit.
“This pattern of duplicated taxation could occur at every stage for other remote areas, resulting in compounding costs that trickle down to consumers.
“It is, in essence, the people of Sarawak—not the shipowners or operators—who ultimately bear this burden. Shipowners and operators merely act as agents, collecting this tax on behalf of the federal government,” he said when debating in support of the Supply (2025) Bill, 2024 during the Sarawak Legislative Assembly (DUS) sitting here today.
Chieng further said the compounded SST not only drives up prices of essential goods in rural areas but also creates a significant disadvantage for those already facing logistical barriers.
“Rakyat in Kapit, Song, Belaga, and many other inland and coastal areas must pay a higher cost of living solely because their locations require multiple stages of transportation.
“Such a structure runs counter to the principles of economic fairness, especially when our goal as a state is to improve the quality of life for all Sarawakians, regardless of their location,” he added.
Chieng further called for the Sarawak government’s intervention to advocate for an exemption of the SST and emphasised the need for the Federal Ministry of Finance to understand the impact and reconsider the tax structure to support Sarawak’s unique needs. — DayakDaily
