Scrap metal export tax revised to 10% in Sabah, says state minister

KOTA KINABALU: Sabah will now only charge a 10% sales tax on scrap metals exported out of the state, said state Industrial Development and Entrepreneurship Minister Phoong Jin Zhe.

This was due to opposition by scrap metal dealers on the imposition of the previous RM200 per tonne metric state sales tax for scrap metal exports which amounted to some 13% on the current scrap metal market price.

Speaking to reporters here on Wednesday (April 12), Phoong said the state had implemented this rate since Feb 1 last year following the lifting of the scrap iron export ban the same month.

However, he said, scrap metal dealers particularly from the Sabah Scrap Metals Recycle Association (SSMRA) had objected to the levy as it was burdensome to them.

“Scrap metal dealers complained they will be severely affected if the price of scrap iron at the international market dropped as they had to pay the RM200 per metric tonne sales tax.

“On the other hand, the government’s income will not grow if there was a rise in the world scrap prices.

“As such, the state government agreed to revise the sales tax to 10% as this will benefit both sides,” Phoong said, adding that developing countries such as India and China also adopted such a practice.

On another matter, the minister said the state government has agreed to use the London Metal Exchange and barchart as a reference platform to control the scrap metal export prices locally.

He said the lack of a reference point previously was the main reason why many scrap exporters could set the prices in the local market by referencing a source that would only benefit them.

Phoong said the government also agreed that all scrap dealers with weighing scales must apply for a state government approval licence (SGA) to operate.

This was crucial, he said, so that the government could build a database for future references.

“The Department of Industrial Development and Research (DIDR) has been given full authority to implement this task.

“For SGA licence holders, they are required to update their information in the database once a month while the licence renewal must be done once in two years,” he said.

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