More calls from Sabah to postpone expanded SST
Ummi and Kenny.
KOTA KINABALU (June 18): More leaders in Sabah are calling on the Federal Government to postpone implementing the expanded Sales and Services Tax (SST) in Sabah beginning July 1.
Sabah Umno Puteri chief Ummi Nabilah Jamal said the delay is necessary due to the lack of an inclusive impact study and the disproportionate burden it would place on low-income Sabahans.
Ummi Nabilah warned that enforcing the policy without proper planning and a targeted approach could deepen economic struggles in one of Malaysia's most disadvantaged states.
'This policy, while not wrong in principle, will become another major strain on the people of Sabah if carried out hastily. Sabahans are already living in a reality very different from that in Peninsular Malaysia,' she said.
Citing data from the Department of Statistics Malaysia, she noted that the average monthly income in Sabah is RM1,870—well below the national average of RM2,800.
'With such low purchasing power, how are people expected to bear the additional costs brought by the SST? We are not just talking about numbers. We are talking about mothers struggling to buy milk for their children and families barely able to pay rent.'
She also raised concerns about widespread confusion on the ground, especially among small business owners and suppliers who remain unclear about which products fall under the 5% or 10% SST rates and which are exempt.
'This confusion can lead to unscrupulous practices by some traders who might simply impose the highest rate on all goods. And who pays the price in the end? The rakyat,' she said.
Ummi Nabilah questioned whether taxing Sabah's poor had become the Federal Government's fiscal strategy. 'Is there no more equitable and sustainable way to close the fiscal gap without burdening one of the most economically challenged states?'
While reaffirming Sabahans' commitment to national development, she stressed that tax policies must be rooted in regional fairness.
'We need inclusive and progressive policies — not regressive steps that target those easiest to tax simply because they have the least ability to resist,' she said.
She urged the Federal Government to delay SST enforcement in Sabah until an independent, inclusive impact study is conducted, with input from industry players, academia and civil society.
'We cannot implement national policies in a one-size-fits-all manner. Sabah's economic structure is different, and this must be acknowledged.'
In addition, she called on the Sabah State Government to introduce mitigating measures such as temporary incentives for small entrepreneurs, restructuring of basic goods subsidies, and expanded targeted aid for low-income families.
'This is not just a policy issue — it's about food on the table, access to healthcare, and the future of our children. The Federal and State Governments must listen to the real voices of Sabahans — not just statistics at negotiation tables, but the cries of the people at markets, on farms, and in kampungs,' she said.
Parti Solidariti Tanahairku (Star) deputy president Datuk Kenny Chua also called on the federal government to reconsider its plan to expand 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 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 SST rates, as announced in Budget 2025, will come into effect on July 1, 2025.
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