DBKK urged to stop acting as federal tax collector

Yong
KOTA KINABALU (June 1): Kota Kinabalu City Hall (DBKK) should stop playing the role of federal tax collector to hunt down inactive taxpayers, said former chief minister Datuk Yong Teck Lee.
He said these hawkers and micro businesses are not major tax evaders. They are small, informal traders already battling rising costs, subsidy cuts, and declining purchasing power.
Yong said the CEO of Lembaga Hasil Dalam Negeri Malaysia (Inland Revenue Board) had announced that LHDN Sabah collected RM5.7 billion in taxes from Sabah in 2024. LHDN also targets tax revenues of RM6.2 billion for this year 2025. This means an average of RM6 billion in taxes from Sabah per year for 2024 and 2025 alone.
'It is not rocket science that 40% of that RM6 billion tax revenues is RM2.4 billion. This RM6 billion tax revenues excludes other tax revenues collected by the Customs Department and other federal agencies in Sabah.
'Yet Sabah has not received its rightful 40 per cent share of that revenue that Sabah is entitled to under the constitution,' he said in a statement on Sunday.
Yong said there is absolutely no reason for the federal government to delay making annual payments of at least RM2 billion to the Sabah government.
Instead, Sabah is paid an interim amount of only RM600 million, which is a figure plucked from nowhere.
He said enforcing tax compliance in this climate, while RM2 billion in Sabah's share remains unreturned, only worsens economic fragility and damages local economic resilience.
'DBKK must adjust its mindset. It should stop aligning with federal LHDN enforcement while the billions owed to this region remain unpaid. DBKK should not contradicts its role as a local government agency in uplifting livelihoods in Kota Kinabalu city,' said Yong.
He called on the federal government to honour the 40 per cent entitlement without further delay. Until then, tax enforcement in this region should be re-evaluated, paused if necessary, and guided by consultation with the Sabah government and Sabah business organisations.

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