Sabah to plug loopholes in tax collection from palm oil mills

Sabah Finance Minister II Datuk Seri Masidi Manjun.

KOTA KINABALU: Sabah moved to tighten loopholes in the collection of state sales tax (SST) after graft investigators found that palm oil mills were evading millions of ringgit in taxes.

Sabah Finance Minister II Datuk Seri Masidi Manjun said that they would be setting up an online system to ensure palm oil mills do not falsify or under-declare their SST.

"The state finance ministry has agreed to create an integrated online system with them and the Malaysian Palm Oil Board (MPOB) to prevent falsification of declarations," Masidi said on Friday (July 1).

He said measures such as improving the enforcement and collection processes as well as amending laws and regulations (if necessary) would be carried out.

He added this was to ensure leakages did not occur and that the interests of the state government were safeguarded.

Masidi also said they would form a task force involving the state finance ministry, MPOB and Malaysian Anti-Corruption Commission (MACC) to collect any undeclared sales taxes.

"The state finance ministry has agreed to give a moratorium period to the companies involved.

"These companies can apply for re-assessment if they have made an incorrect declaration and pay the actual tax owed," he said.

On May 18, Sabah MACC investigators arrested two state finance ministry staff, including a retired officer, for corruption by abetting oil palm mills to under-declare SST due.

The duo is believed to have received RM700,000 in bribes from a palm oil mill in Lahad Datu to "overlook" the mill's false declarations of crude palm quantity oil to evade state taxes amounting to about RM2mil a month since 2015.

The case is still under investigation.

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