My comments on the increase of Sales & Service Tax (SST)

I have urged local tourism industry players to manage the of Sales and Service Tax (SST) properly to make sure that the proceeds will go to the Federal Government’s coffer that will be used to administer our country.

Our local media friends had requested my comments on this matter recently because the tourism sector and hospitality services are among affected by the increase in the SST from 6 to 8 per cent. These include hotels and accommodation, karaoke centres, massage parlours, night joints and private clubs, golf clubs and hire car/charter buses and domestic flights.

The Ministry of Finance (MoF) had recently announced that the new rate only focuses on discretionary activities and business-to-business services. It will therefore shield the public from paying higher consumption tax for key essential services that include food and beverage, telecommunications, parking and logistics.

In relation to that, our Ministry of Tourism, Creative Industry and Performing Arts Sarawak will monitor the impacts of the increase to the SST on the state’s tourism industry.

It is premature for his ministry to assess the increase from 6 to 8 per cent that took effect on March 1.

Whether the increase is justifiable or not or whether it is a burden or otherwise, we will see how it goes from today and if it is not a burden, then it is good, but if it is a burden, then we will need to see and decide how to reduce the burden.

However, the increase is unavoidable as the government must run the country with funds generated from such taxes. Of course, initially, the people will make a lot of noises, but after a week or two, they will forget about it.

I have also expressed hope for those involved in the tourism industry not to take the opportunity of the increase, such as not paying the tax to the government even though there are some joints who are allegedly doing that.