Exempt Sabah Sarawak from GST or Return 40% of Revenues Collected - Dr. Jeffrey

KOTA KINABALU: “There are more than sufficient reasons to exempt Sabah and Sarawak from GST.  If the federal government insists on collecting GST, then it should return 40% of the GST revenues collected from Sabah and Sarawak in accordance with the Tenth Schedule of the Federal Constitution” said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief in reference to the imposition and collection of GST and non-exemption of GST for the Borneo States.

It seems very obvious that the PM cum Finance Minister and the federal government have no regard for the Federal Constitution and the laws of Malaysia and do not care for the welfare and well-being of Sabahans and Sarawakians as far as the Budget on GST is concerned.

It is clearly spelt out in Article 95B(3) of the Federal Constitution that sales tax, which includes the GST, is deemed to be a matter under the State List under the Ninth Schedule and not under the Federal List. 

In Point No. 11 of the 20-Points, Sabah was to have control of its own finance, tariffs and development funds. Under Item 2(1) of the Tenth Schedule in the Federal Constitution, Sabah is entitled to two-fifths (40%) of the net revenue collected from Sabah.

Whatever the federal and Sabah ministers say and lie about GST bringing down prices or the people won’t be affected, Budget 2015 confirms that an additional RM9.4 billion will be raised from the GST projected at RM23.2 billion.  This RM9.4 billion is going to be coming out of the people’s pockets in 2015 starting 1st April besides having to bear higher costs of living caused by the knock-on effect of the GST.

There are no two ways about it.   The federal government should stop “stealing” money from Sabahans and Sarawakians through the GST.   It is not acceptable for GST to be imposed after the “theft” of 95% of its oil revenues. The federal and Sabah governments need to work towards a plan to secure exemption of GST in Sabah and Sarawak.

If the federal government is still adamant on collecting GST from Sabah, then it must return 40% of the net collections to the Sabah government under the Tenth Schedule. And the Sabah government should use this 40% to benefit Sabahans who are already suffering due to higher costs, partly due to the cabotage policy, lower minimum wages and lack of economic opportunities, the latest being the plan by Umno-linked companies taking charge of the Pan Borneo Highway and further depriving Sabah contractors.

If the federal government can choose to ignore the Federal Constitution, it cannot be trusted to treat Sabah equally and fairly.   The GST adds another reason for Sabahans and Sarawakians to re-consider their position in Malaysia.

Datuk Dr. Jeffrey Kitingan

Chairman, STAR Sabah / BHF President

19 October 2014