Press Conference on 50% reduction on SST imposed on imported tyre including tyres attached onto the imported vehicles into Sarawak
ACCCIS conducted a press conference on 29th January 2021 with the press statement released as below:-
In the meeting held in November 2020 between The Associated Chinese Chambers of Commerce and Industry of Sarawak (ACCCIS) and the stakeholders of the tyres industry, namely Sarawak Tyre Dealers and Retreaders Association, The Sarawak Bus Transport Companies Association, Sarawak Lorries Transport Association and Kuching Bicycle and Motor Traders Association, ACCCIS was entrusted to put forward an appeal to the state government to abolish the State Sales Tax (SST) imposed on imported tyre including tyres attached onto the imported vehicles into Sarawak which comes into effect on 1st January 2020.
Accordingly, ACCCIS has submitted a letter of appeal incorporating the views and inputs of all relevant stakeholders for consideration of our Chief Minister. The grounds of our appeal are outlined as follows:
(a) that the projected revenue to be collected from 5% of SST imposed on imported tyres is only amounted RM10 million for 2021, yet such drastic imposition of SST on this essential item would have grave repercussion on the local business community as it would translate into higher cost of operation and consequently, it would have some knock-on effects on the prices of goods and services to be absorbed by the end-users and consumers at large;
(b) that tyres could be regarded as essential consumer goods for most Sarawakians as motor vehicles are their main means of transportation. In fact, rural folks would tend to consume more tyres because of the geographical distance they need to cover. Consequently, consumers especially the low income group that are struggling to make ends meet in the prevailing economic scenario will end up suffer more;
(c) that there seemed to be “unfair or inequitable categorization” in the implementation of SST as business operators who import the tyres for their own consumption will be exempted from SST and such loophole in taxation might be exploited by certain unscrupulous individuals which would create unfair competition in trade and at the same time, encourage smuggling activities;
(d) that the complexity and the administrative cost involved in the collection of such SST coupled with the spillover costs passed on to the end-users and consumers would far outweigh the benefits deriving from the projected revenue of mere RM10 million collected by the state government from the SST imposed on imported tyres; and
(e) that indeed, we applaud the efforts of our state government in strengthening our fiscal position by expanding the revenue base, notably through the collection of the State Sales Tax from the petroleum products, crude palm oil and crude palm kernel oil as well as the raw water royalty. However, we have not been able to comprehend the logic of introducing the SST on imported tyres as the total revenue collected is not substantial at all to the state’s coffer but yet from the perspective of the business community and the consumers in general, its negative consequential impact could be far-reaching.
We are delighted to inform that we had received a formal reply to our appeal from the Comptroller of State Sales Tax Sarawak yesterday notifying the decision of the Authority to reduce the tax rate for imported tyre including tyres attached onto the imported vehicles into Sarawak by 50% effective 4th January 2021 until further notice.
ACCCIS is pleased that the state government has promptly responded to the plight and appeal of the stakeholders concerned and that ACCCIS is indeed grateful to be able to play an effective intermediary role and serve as a useful consultative platform between the government and the private sector in our quest to provide a conducive and friendly business environment for the entrepreneurs and investors.
(The Borneo Post)
(New Sarawak Tribune)