KOTA KINABALU, Sept 2 — Air transport service in Sabah and Sarawak will be exempted from the Sales and Service Tax system as it is a critical and important mode of transportation for the people in both the states, said Finance Minister Lim Guan Eng.
He said the tax exemption was a privilege given to the two states by taking into account their size.
“Sabah and Sarawak are so vast and large. The air transport system is very critical and important. That is why the tax (for air transportation) is exempted,” he added.
The move, he said, would be shocking as air transport was taxed under the implementation of the Goods and Services Tax (GST) system by the previous government
He told reporters this after attending a briefing on the implementation of the SST, organised by the Royal Customs Department here today. Also present was Customs director-general Datuk Seri T. Subromaniam.
On today’s briefing, Lim said it provided an opportunity for the government, especially his ministry, to get feedback from the people on the implementation of SST.
Based on the feedback, he said, the government would make the necessary amendments to better improve the SST system to be carried out at the end of the year.
“The economic well-being of the people is more important than talking merely about increasing taxes. I’m not saying that increasing tax revenue is not important. It’s important but in the larger context, you should see that the economic well-being of the people is more important.
“What is the point of having a lot of tax collection if the people are suffering? And we know that this is what GST has done to the rakyat. The rakyat never suffered as much as when they suffered under the GST,” he added.
He said the people would still feel the pinch with the implementation of SST, but the burden would be lighter than during the time of the implementation of GST. — Bernama