Abolish sales tax on tyres to ease people’s burden, Wong urges state govt


Wong said this was following numerous complaints received from tyre dealers whom requested the government to scrap the sales tax. — AFP photo

KUCHING (Nov 25): Bawang Assan assemblyman Dato Sri Wong Soon Koh today urged the state government to abolish the sales tax on tyres so it will not burden the people.

He said this was following numerous complaints received from tyre dealers which requested the government to scrap the sales tax.

“I noticed the sales tax on tyres collected is a mere RM3 million. I received numerous calls from tyre dealers requesting the government to do away with the five per cent sales tax on all types of tyres,” he said in his debate speech for the second reading of the Supply (2023) Bill during the State Legislative Assembly (DUN) sitting here today.

Wong pointed out the tax had also burdened businesses dealing in transportation and logistics.

“It would be fair for the state to have some consideration for the people, as the state government has always been financially stable by announcing billions of revenues.

“Now that our state’s overall revenue has breached RM11 billion, I would like to urge the state government to abolish the five per cent sales tax on tyres – which would benefit all car and vehicle owners,” he said.

On the state’s revenue projection for 2023, Wong said credit must be given to Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg for increasing the state’s revenues after imposing five per cent State Sales Tax on petroleum products.

However, he noticed the Interest Income for 2023 had dropped sharply to only RM650 million.

“The state is projected to collect a revenue of RM11.035 billion, surpassing RM11 billion for the first time. Since the imposition of sales tax in 2019, our state revenue has annually surpassed RM10 billion.

“Credit must go to our Premier for his revenue reengineering effort. But I noticed there is a sharp drop for 2023 in non-tax revenue, namely Interest Income which amounted to only RM650 million.

“We know that Interest Income is derived from the interest accrued on deposits of our Reserve Fund with commercial banks or money loaned to the Development Bank of Sarawak (DBOS),” he said.

Wong said the state government must explain the cause of the shortfall of Interest Income, given that most of the state’s coffers were allocated to DBOS.

“Can the Ministry of Finance explain why there is a sharp drop in Interest Income since 2021? Could it be due to the reduction in our Reserve Fund? Or did we fetch lower interest rates from commercial banks?

“How much is the Reserve Fund now? How much of the Reserve Fund has been transferred to DBOS? Is DBOS paying interest as what all other commercial banks do?” he queried.

Citing the total of the Interest Income derived from 2016 to 2021, Wong said the amount had further declined since 2020.

“All along our Interest Income had always surpassed RM1 billion. In 2016, (it was) RM1.183 billion; RM1.177 billion (2017); RM1.008 billion (2018); RM1.006 billion (2019); RM1.058 billion (2020).

“After the year 2020, the Interest Income dipped below RM1 billion – in 2021, it was only RM822 million and in 2023, it further declined to RM650 million,” he said.