KOTA KINABALU: Parti Solidariti Tanahairku (Star) deputy president Datuk Kenny Chua has called on the Federal Government to reconsider its plan to expand the Sales and Service Tax (SST), expressing concern about its potential impact on the cost of living in Sabah.
Chua said the proposed move could add financial pressure on Sabahans, many of whom are already facing economic challenges. He also urged the government to provide more clarity on how the additional revenue would be used.
“The Federal Government should explain the reasons behind this decision, and more importantly, how the funds collected from the expanded SST will be utilised to support the people,” he said in a statement on Tuesday.
The Finance Ministry, in a statement on June 9, said the SST expansion aims to strengthen the country’s fiscal position by broadening the tax base and increasing revenue. The ministry also noted that the measure is intended to enhance the social safety net without placing excessive burden on the public.
Chua, however, said further explanation is needed to ensure that the policy does not disproportionately affect lower-income communities, especially in Sabah, which continues to face development and economic gaps compared to other states.
He also pointed out that with Sabah expected to hold State Elections later this year, the timing of the announcement may raise concerns among the public.
“To ensure the policy is well-received and understood, the Federal Government should consider engaging with the State Government and other stakeholders before moving forward,” he added.
Chua proposed that the Federal Government temporarily defer the SST expansion and open up discussions with relevant parties to address concerns on the ground.
The reviewed and expanded Sales and Service Tax (SST) rates, as announced in Budget 2025, will come into effect on July 1, 2025.
facing economic challenges.
