KOTA KINABALU – Sabah wants a slice of the Federal Government’s Goods and Services Tax (GST) because the state is unable to expand its revenue sources under its own State Sales Tax.
Sabah Special Tasks Minister Datuk Teo Chee Kang said the implementation of GST has denied the Sabah government from expanding the scope of the State Sales Tax.
“Expanding the state tax would tantamount to double taxation,” he said.
Furthermore, any expansion of State Sales Tax allowed under the state constitution would further burden the people,” said Teo, who heads the state government’s Sabah Rights Review Committee that is looking into devolution of powers.
There should be a formula to enable a fair share of GST collected from Sabah to be given back to the state, he added.
He said apart from the proposal on finance, a special Devolution of Powers Committee chaired by State Secretary Tan Sri Sukarti Wakiman has also looked in-depth into various issues in the state and federal administrations.
He said the state rights committee, in adopting the various proposals to be discussed, has put more emphasis to legal and fiscal aspects, especially Sabah’s entitlement to the Special Grant under the Tenth Schedule, Part IV of the Federal Constitution.
“We maintain that by virtue of Article 112D, the five-year periodical review of the special grant is mandatory, and failing to do so is a breach of the Federal Constitution,’’ he said in a statement here Tuesday.
The state rights committee is also re-looking at the legal definition of the state boundary and the applicability of the Territorial Seas Act 2012 to Sabah.
“This will have direct implications on the territorial powers of the Sabah government,” he added.
A working committee was formed to study all related legal issues in detail and two meetings have been held so far, on Dec 22 and Jan 9, he said.
The committee will hold a hearing on Sabah’s rights for all political parties at the state assembly building on Jan 26.