Apportion GST revenue to state, local govts call

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KOTA KINABALU - Sabah Progressive Party (SAPP) president Datuk Seri Panglima Yong Teck Lee has proposed channeling part of the revenue collected from the Goods and Services Tax (GST) directly to the state governments and let them decide how to use the money.

Yong suggested that out of the six per cent GST, two per cent should go to the Federal Government, two per cent to the state governments and two per cent to the local governments.

Yong pointed out that the state governments always had to apply for allocation from the Federal Government.

However, he said the Federal Government might not be able to grant the total amount which the state governments applied for.

“If the state governments applied for RM1 million, the Federal Government might only allocate RM300,000.”

Subsequently, Yong said the state governments would have to wait for mid-term review to reapply for allocation.

In addition, Yong said the people were unwilling to pay GST because they were worried that the tax revenue would not be professionally used, or used in the wrong places, for example, to bail out the debt-laden 1Malaysia Development Berhad (1MDB).

Furthermore, he said Sabahans were paying more GST than their peninsula counterparts as the goods here were more expensive due to cabotage policy and other factors.

If the government wanted the people to pay GST willingly, the government must be transparent and ensure that the revenue collected from the tax regime would be spent in improving the people’s environment, he said.

Hence, he suggested Putrajaya channel part of the revenue collected from GST directly to the state Governments and let the latter have the autonomy to decide how to spend the fund.

He added that Putrajaya could emulate China, whereby the central administration would allocate tax revenues directly to provincial administration.

Putrajaya should only get two per cent of the total six per cent GST, while the remainder to be equally shared between the state governments and local governments, Yong said during a GST forum at the Save ‘n’ Invest for Financial Freedom roadshow and seminar here yesterday.

The event was organized by Money Compass, a financial magazine published by Universal Media Publishers (M) Sdn Bhd.

Meanwhile, a Customs enforcement officer reported that 20,745 companies in Sabah had registered for GST, almost doubled the initial target of 11,000, during the forum.

Of the 20,745 companies, 11,358 are from Kota Kinabalu, 3,353 from Tawau, 1,789 from Lahad Datu, 3,232 from Sandakan and 1,013 from Keningau.

Also present were Customs Department GST director Dato’ Subromaniam Tholasy and organizing chairperson Amy Seok - BP