KOTA KINABALU: The Federation of Chinese Associations Sabah (FCAS) has called on the state government to immediately suspend the sales tax imposed on all seafood exports which starts this month.
Its President Tan Sri T.C Goh who is also a member of the State Economic Advisory Council (SEAC) said this is only appropriate, in view of the fact that a vast section of the state economy has been badly devastated by the Covid-19 pandemic and has yet to recover.
He pointed out that the implementation of the sales tax would have two adverse impacts on the seafood export industry i.e. i). the transfer of the additional cost would inevitably cause an increase in the prices of seafood thus causing the industry to lose its competitive edge, and ii). it would significantly reduce the profit margin of the exporters, if they were to absorb the additional cost.
He reiterated that the above mentioned scenarios would be detrimental to the industry players, the fishermen included, who have been struggling to stay afloat since the Covid-19 outbreak.
“Currently, with the economy and business sector of the country, Sabah included, being badly affected by the pandemic, it is certainly not the right time to proceed with the sales tax on seafood export,” he said.
In a statement issued today, Goh who is also President of the Federation of Chinese Associations Malaysia (Huazong) and President of the Federation of Sabah and Labuan Hokkien Associations (FSLHA), also called on the relevant government departments and agencies to conduct dialogues with the seafood exporters in the state or their representatives, to gather feedback from them; this is in order to find a ‘win-win’ solution.
The Sabah government had on April 28 sent instructions to seafood exporters that the tax will be imposed on seafood exports, specifically 5% on fish, and 10% on crabs and lobsters, beginning May 1. Exporters were given a three-month grace period, which ended on Saturday.
Goh said, during this extraordinarily challenging time, the state government should temporarily hold on to it until the economy has fully recovered, and the people and businesses are out of the woods.
He noted that, since its introduction in 2014, the state government had attempted to implement the seafood export sales tax in 2015 and 2019, but it had to back down from implementing it following strong protests from the industry players.
He further noted that, although the said sales tax had undergone some adjustments previously, there are nonetheless still some flaws in it hence unacceptable to the industry players.
He pointed out that, in some countries, the governments not only do not impose tax unnecessarily, they even provide special incentives like tax rebate to fishermen, to boost marine production and to encourage export.
“Perhaps the Sabah government should take a cue from such an encouraging and beneficial policy,” he concluded.-pr/BNN
