Sabah defers state sales tax on seafood exports till June

KOTA KINABALU - The Sabah state government has agreed to defer the State Sales Tax imposed on seafood exports until June 2022, the Sabah State Assembly was told.

Sabah Assistant Finance Minister Jasnih Daya said the decision is final and details of this deferment will be issued via a Finance Ministry notice later.

The tax is imposed on the companies involved in seafood exports but not on the fishermen, Jasnih said.

"The state government is aware that whenever a sales tax is imposed, traders either absorb it or pass it on to other parties, in this case, the fishermen.

"This situation (of absorbing or passing it on) is beyond the state government’s control because it is based on a ‘willing seller, willing buyer‘ commercial practice," he said in response to a question from Chong Chen Bin (Warisan-Tanjong Kapor) who asked whether the 5 per cent sales tax was officially confirmed for implementation or whether it would be considered as a export tax as of May 2021.

Jasnih said the Sabah government gazetted the State Sales Tax (Tax Rate) Order 2021 to impose tax on seafood leaving the state through the state finance ministry, and via that legal process, tax was to have been enforced on May 1, 2021.

However, the state government agreed to defer it between May 1 and Dec 28 last year after hearing industry appeals, with the deferment extended to June 30, 2022, he said.

"The objective of this tax is to ensure sustainability of the state's seafood supply following complaints that there is a lack of supply of quality fish stock for local state consumption.

"This tax collection is also to raise state revenue following the operating and development expenditure which continues to rise annually.

"The proceeds from this tax collection is to provide infrastructure and public amenities to raise the socio-economic level of the locals, including the fishing community," he said. - BERNAMA