Hefty fine, longer jail term for late sales tax payment

KOTA KINABALU: The State Legislative Assembly yesterday passed amendments to the Sabah Sales Tax Enactment 1998, including increasing the penalty rate for late tax payment as well as imposing a heftier fine and longer jail term on offenders.

With effect from January 1 next year, the late payment of the state sales tax will see an increase in penalty from two per cent to 10 per cent.

At the same time, offenders of the enactment, on conviction, shall also be liable to a fine not exceeding RM50,000 or imprisonment of not more than three years or both beginning next year, from the current maximum fine of RM20,000 or imprisonment up to two years.

Assistant Finance Minister Saripuddin bin Hatta said the amendments were necessary to improve legislation, collection and enforcement of the Sabah Sales Tax Enactment 1998 in line with changing times, environment, technological development and best practices.

He said the government proposed to change the existing tax assessment system to its own system.

Under the new system, he said taxpayers were entrusted to fulfill their responsibility in filing their tax and paying the due amount to the State Sales Tax office within 28 days of the taxation period.

Saripuddin said the amendments had included a heavier penalty for late payment of tax as well as increase in fine and jail term for offences under the enactment to improve the filing and payment of state sales tax.

He said the heavier penalties aimed to enhance the payment and assessment of the state sales tax.

In addition, he said the State Government would also be imposing tax on online sales.

Saripuddin said this when tabling the Sabah State Sales Tax Bill (Amendment) 2018 at the State Legislative Assembly sitting in Likas yesterday.

Meanwhile, Paginatan assemblyman Datuk Abidin Madingkir said the Bill should be supported as it allowed the State Government to increase or broaden its sources of income.

Nonetheless, he said enforcement of the enactment was also equally important.

“There is no point for us to have stringent regulation but fails to enforce it,” he said when debating the Bill.

In response, Saripuddin said enforcement was carried out by a working committee headed by the State Attorney-General’s Chambers, State Treasury Department, Economic Planning Unit Sabah and the Sabah Ministry of Finance.

He said the State Government had imposed the state sales tax on crude palm oil (CPO), lottery and slot machines since 1999.

“In 2014, the State Government had collected RM1.167 billion in sales tax from CPO, lottery and slot machines, whereas RM1.16 billion was collected last year.”

He added that the State Government also sought to expand the state sales tax on bringing out fishing commodities from Sabah next year.

Meanwhile, Elopura assemblyman Calvin Chong asked the Finance Ministry whether any subsidies or assistance would be provided to oil palm smallholders in light of the fall in CPO prices.

Saripuddin replied that the State Government needed revenues to implement developments and manage the State’s finances next year.

“Hence, we do not have plans to provide subsidies to smallholders.”