8% SST, removal of diesel subsidy will burden Sabahans, says Warisan VP

KOTA KINABALU: The move to raise service tax and remove diesel subsidies under Budget 2024 is a recipe for hardship for Sabahans, says Parti Warisan vice-president Datuk Junz Wong.

He said the proposed sales and services tax (SST) increase from 6% to 8%, particularly for the logistics services, was a cause for concern as it would inevitably lead to price hikes across the board for goods and services in Sabah that was already grappling with a high cost of living.

“Many Sabahans are struggling to make ends meet, with a significant portion living below or just at the poverty level.

“Sabah could potentially experience a substantial rise in both the cost of doing business and the cost of living, with estimates ranging from 20% to 30%, should the Federal Government decide to implement an 8% increase in logistics service charges and remove diesel subsidies for the region,” he said.

“I am pleading to the Federal Government to have empathy towards Sabahans and try to understand our predicament.

“Please put yourself in Sabahans’ shoes and try to understand the hardships faced by the people of Sabah,” said Wong, who is also Tanjung Aru assemblyman.

Furthermore, he said the withdrawal of the diesel subsidy would be a heavy burden for ordinary Sabahans as many rely on diesel powered four-wheel drive vehicles due to the challenging road conditions in Sabah.

“The removal of this subsidy would lead to a significant increase in transportation costs, driving up the prices of goods,” he added.

Wong said the Federal Government must thoroughly evaluate the consequences of these changes on the cost of living in East Malaysia.

“I urge the government not to impose an 8% SST on shipping and logistics and to continue the diesel subsidy for ordinary Malaysians in Sabah and Sarawak,” he said.

He also proposed a tiered approach to SST implementation, with lower rates for services below RM3mil and higher rates for larger businesses, which would help avoid widespread inflation.

“Maintaining 6% SST on logistics services and the diesel subsidy for Sabah and Sarawak is seen as a practical solution,” he said.

He said the approach would benefit the people, stabilise living costs and prevent economic displacement.