Expert: GST in Sabah, S’wak breach of MA63
“GST is another form of sales tax, differing only in the manner in which it was imposed.”
Sabah and Sarawak, he pointed out, already have their state sales tax since 1963. “Imposing the GST, in addition to the states sales tax, was akin to collecting tax twice on the same products and services. It also robs the state coffers in Sabah and Sarawak of revenue unless the Federal Government can compensate them.”
Zainnal added that the GST was discriminatory and illegal and tantamount to “double taxation”. “The Federal Government must refer to MA63 and its annexures including the Inter-Governmental Committee Report (IGC).”
“The Federal sales tax cannot take priority over the state sales tax, cannot be imposed without the sanction of the Sabah and Sarawak assemblies, and risks a breach of MA63.”
The activist was expressing the hope that Sarawak Chief Minister Adenan Satem, facing imminent state elections, would clarify that the GST in Borneo was part of his negotiations with Putrajaya on devolution of powers and reconciliation of Federal laws with MA63. “The sales tax imposed in Sabah alone on crude palm oil amounts to RM1 billion a year.”
The state sales tax, said Zainnal in revisiting the issue, was imposed only once, at the final stage. “The GST, however, is imposed at every stage from the beginning to the end. At each stage, the selling price increases and cannot be reclaimed by way of rebates.”
“The seller will reclaim the 6 per cent GST paid at his stage of the transaction but the price increase continues until the end consumer.”
The final product, he continued, carries the 6 per cent GST imposed at every stage of providing the goods and services. “This increases the price exponentially and businessmen simply transfer the final price to the consumer.”
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