Press Statement By Chong Chieng Jen:
The State Government should not impose the State Sales Tax on tyres, be it 5% or the reduced 2.5%. State’s autonomy on the imposition of Sales Tax should not be exercised to burden the people.
At present, throughout the whole country, tyres are subject to 5% Federal Sales Tax. For tyres imported from countries outside ASEAN, an additional 5% Import Duty is imposed.
The Sarawak State Government has autonomy to impose the State’s Sales Tax in addition to the Federal Sales Tax and Import Duty. A common example of the imposition of the State’s Sales Tax is the purchase of lottery tickets, where punters in Sarawak are paying an additional 10% Sales Tax to the State Government making the lottery tickets in Sarawak 10% more expensive than those sold in West Malaysia.
For the imposition of State Sales Tax on tyres sold in Sarawak, the State Government previously proposed to impose 5% State Sales Tax with effect from 1-1-2020 but was delayed because of strong objection from the business sector and the economic recession caused by the Covid-19 pandemic. Therefore, the 5% State Sales Tax was not implemented.
At the end of last year, the State Government proposed to impose a 2.5% State Sales Tax on tyres and the State Government’s directive for the imposition of such tax with effect from 4-1-2021 was also issued to all relevant stakeholders.
To the business sector and consumers in Sarawak, if this 2.5% State Sales Tax were to be implemented, prices of all tyres in Sarawak will increase by 2.5%, NOT a reduction in tyre prices as portrayed earlier by certain news reporting. It is effectively an imposition State Sales Tax from 0% to 2.5%.
Tyres are essential to all transportation people and goods. With the imposition of this 2.5% 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.
Chong Chieng Jen
DAP Sarawak Chairman