SST for imported tyres down 50 pct, reveals ACCCIS

KUCHING: The State Sales Tax (SST) rate for imported tyres including those attached onto imported vehicles has been reduced by 50 per cent.

This was revealed by Associated Chinese Chambers of Commerce and Industry of Sarawak (ACCCIS) president Dato Tan Jit Kee, adding that the 50 per cent tax rate reduction took effect starting Jan 4 this year until further notice.

This follows an appeal by ACCCIS that previously called on the state government to abolish the SST on imported tyres.

“We are delighted to inform that we had received a formal reply to our appeal from the Comptroller of SST yesterday, notifying the decision of the authority to reduce the tax rate for imported tyre including tyres attached onto imported vehicles into Sarawak by 50 per cent effective Jan 4, 2021 until further notice.

“We are pleased that the state government has promptly responded to the plight and appeal of the stakeholders concerned and that ACCCIS is indeed grateful to be able to play an effective intermediary role and serve as a useful consultative platform between the government and the private sector in our quest to provide a conducive and friendly business environment for the entrepreneurs and investors,” Tan said in a press conference today.

The SST on imported tyres came into effect on Jan 1 last year. Imported tyres would be charged five per cent SST per piece while those attached to vehicles being imported into Sarawak would be charged based on the size of the vehicles.

Stakeholders and local tyre vendors have since voiced their concerns and called on the state government to defer its implementation.

Tan said a letter of appeal was submitted to the state government, incorporating the views and inputs of all the relevant stakeholders for Chief Minister Datuk Patinggi Abang Johari Tun Openg’s consideration.

This follows a meeting held between ACCCIS and Sarawak tyres industry stakeholders held in November last year.

According to Tan, the appeal outlined that the projected revenue to be collected from 5 percent of SST imposed on imported tyres is only amounted RM10 million for 2021 and yet such drastic imposition of SST on the ‘essential item’ would have grave repercussion on local business community

This, he added, would translate into higher cost of operation and consequently leading to some knock-on effects on the prices of goods and services to be absorbed by the end-users and consumers at large.

With the imposition of the SST, the appeal also outlined that consumers especially those from the low income groups are affected and that most rural folks tend to use more tyres due to the geographical distance that they need to cover. As such, he deemed the tyers as an essential consumer goods for most Sarawakians.

“We applaud the efforts of our state government in strengthening our fiscal position by expanding the revenue base, notably through the collection of the State Sales Tax from the petroleum products, crude palm oil and crude palm kernel oil as well as the raw water royalty – however, we have not been able to comprehend the logic of introducing the SST on imported tyres as total revenue collected is not substantial at all to the state’s coffer but yet from the perspective of the business community and the consumers in general, its negative consequential impact could be far-reaching.

“There seemed to be ‘unfair or inequitable categorisation’ in the implementation of SST as business operators who import the tyres for their own consumption will be exempted from SST and such loophole in taxation might be exploited by certain unscrupulous individuals which would create unfair competition in trade and at the same time, encourage smuggling activities,

“The complexity and the administrative cost involved in the collection of such SST coupled with the spillover costs passed on to the end-users and consumers would far outweigh the benefits deriving from the projected revenue of mere RM10 million collected by the state government from the SST imposed on imported tyres,” he added.

Also present at the press conference were ACCCIS secretary-general Jonathan Chai, assistant treasurer Ho Siew Hua, Sarawak Tyres Dealers and Retreaders Association president Lim King Hong and Kuching Bicycle and Motor Traders Association president Lau Soon Yiun.

 

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