KOTA KINABALU: State Finance Minister Datuk Seri Masidi Manjun stated on Tuesday (July 21) that Sabah is reviewing its sales tax structure to encourage downstream petroleum and palm oil processing.
“We are in the process of reviewing all the companies currently subjected to the tax to ensure that it encourages them to undertake downstream activities in the state,” he said at the state legislative assembly sitting here.
Masidi stated that authorities engaged industry stakeholders in June regarding the palm oil sector tax. Potential incentives included tax exemptions or reasonable rates to fund research and development.
He also clarified that the federal Sales and Service Tax and Sabah’s state sales tax were two different taxes.
Masidi was responding to a supplementary question from Moyog assemblyman Datuk Donald Mojuntin, who asked whether the state government planned to review tax rates for certain sectors to improve the competitiveness of Sabah’s industries.
Assistant Finance Minister Datuk Ben Chong Chen Bin reported collections of RM1.387bil from major sectors as of June 30. Collections comprised RM679.45mil from petroleum products, RM703.55mil from crude palm oil and biomass, and RM4.22 million from fisheries commodities. The forestry sector remained exempt from state sales tax.
He said the ministry would further study the tax imposed on the petroleum sector to encourage downstream activities in Sabah and reduce the export of petroleum resources without local processing.
