Latest news with #SabahAssociationofProfessionalAccountants
The Star
12-06-2025
- Business
- The Star
Reintroduce flat-rate GST in Sabah, urges accountants association
KOTA KINABALU: The government is being urged to consider reintroducing a simplified Goods and Services Tax (GST). This proposal arises from concerns that the upcoming expansion of the Sales and Services Tax (SST) could burden businesses and consumers, especially in Sabah. The Sabah Association of Professional Accountants (SAPA) suggested a flat-rate GST set at 3% to offer a fairer, more transparent, and efficient taxation model that could ease administrative burdens and reduce cost layering across industries. "We believe a modern GST system, with basic exemptions and simplicity, would better serve Malaysia's fiscal goals while protecting the vulnerable," stated SAPA president Datuk Tan Kok Liang on Thursday (June 12). SAPA expressed concern that the SST expansion, effective July 1, could disproportionately impact Sabah's fragile economy. The inclusion of construction services and commercial property leases under SST could lead to higher project and rental costs, particularly in rural and semi-urban areas. "In Sabah, infrastructure gaps and higher logistics costs already affect businesses. Adding tax pressure in areas like construction and shoplot rentals will further discourage investment and growth," said Tan. He noted that small and medium-sized enterprises (SMEs), considered the backbone of the state's economy, risk bearing the brunt of these changes, with higher costs likely passed down to tenants and consumers. Tan acknowledged positive elements in SST, welcoming exemptions such as residential property rentals, basic goods like rice and medicines, and the exclusion of private healthcare for Malaysian citizens. "These are thoughtful measures that protect lower- and middle-income groups from unnecessary financial strain," said Tan, adding that such exemptions demonstrate the government's effort to balance revenue and social protection. The association argues GST offers advantages over SST, including input tax credits that avoid cascading costs, better audit trails, and stronger alignment with international tax standards, crucial for boosting investor confidence. Tan said a simplified GST system could be tailored to Malaysia's needs and implemented without affecting essential goods and services. "A well-designed GST would be more equitable and sustainable in the long term, likely less burdensome to consumers than the current dual-rate SST," he said. SAPA also raised concerns about mandatory e-invoicing, noting many businesses, NGOs, and religious institutions in Sabah may lack the technical capacity or infrastructure to comply. Tan mentioned that a reintroduced GST would incorporate invoice tracking, making a parallel e-invoicing system redundant for compliance purposes. The group urged policymakers to adopt a more inclusive and consultative approach in tax reform discussions, especially considering regional disparities between Peninsular Malaysia and East Malaysia. "We are ready to work with the government through technical consultations to ensure Sabah's unique economic circumstances are properly represented," Tan said.
Borneo Post
12-06-2025
- Business
- Borneo Post
SAPA: Reintroduce a simplified GST for a fairer, more efficient tax system
Tan Kok Liang KOTA KINABALU (June 12): The Sabah Association of Professional Accountants (SAPA) understands the government's ongoing efforts to broaden Malaysia's tax base and increase revenue collection. However, in light of the recently announced Sales and Services Tax (SST) expansion effective 1 July 2025, SAPA believes there remains an urgent need to consider reintroducing a simplified Goods and Services Tax (GST) as a longer-term solution to achieve efficiency, fairness, and economic sustainability. SAPA acknowledges several positive and balanced elements in the revised SST framework, including: The continued exemption of residential property rentals, which protects homeowners and tenants from additional financial burdens. The decision to apply SST on private healthcare services only to foreign nationals, ensuring that Malaysians — especially those in the B40 and M40 income groups — continue to enjoy tax-free access to essential and urgent medical care. The exclusion of basic necessities such as rice, vegetables and medicines, which helps shield vulnerable communities from inflationary pressures. These targeted exemptions demonstrate the government's intention to balance revenue needs with social protection, and SAPA supports such thoughtful measures. However, SAPA remains concerned that the broader inclusion of construction services and commercial property leases under SST will have disproportionate effects on Sabah, where the business environment is already challenged by higher logistics costs, underdeveloped infrastructure, and geographical fragmentation. Construction services: Taxing this sector will raise overall project costs for both public and private initiatives — affecting commercial development and deterring investment in rural and semi-urban areas. Commercial property leases: The new SST scope covers shoplots, retail outlets, and office spaces — a move that risks escalating rental costs for SMEs, many of which are the backbone of Sabah's economy. This added cost could be passed down to tenants. SAPA calls for the government to consider reintroducing a simplified GST at say a 3% flat rate, with minimal technical complications. GST, which is used in more than 170 countries worldwide, is a more modern and effective consumption tax system. Its advantages include: Eliminating cascading tax effects via input tax credits; Improved transparency and tax audit trails; A broader, more equitable tax base that supports long-term fiscal resilience; Better alignment with international best practices — crucial for attracting foreign investment. Importantly, a lower-rate GST would be less burdensome to consumers than the current dual-rate SST model and can be designed to exclude essential goods and services, similar to the existing SST exemptions.
Borneo Post
03-06-2025
- Business
- Borneo Post
Govt urged to reconsider mandatory stamp duty on employment contracts
Tan KOTA KINABALU (June 3): The Sabah Association of Professional Accountants (SAPA) expresses concern over the recent directive by the Inland Revenue Board (LHDN Malaysia) requiring all employment contracts to be stamped in accordance with the Stamp Act 1949. 'While we recognise the importance of legal compliance and revenue collection, SAPA calls on the government to urgently consider exemptions or threshold limits, especially for small and medium enterprises (SMEs),' said its president, Datuk Tan Kok Liang. He said this policy places additional administrative and financial burdens on businesses — particularly in Sabah, where operating costs are already higher due to logistics, geographic challenges, and a more constrained labour market. 'The move to enforce stamp duty on all employment contracts, regardless of salary level or business size, risks creating unintended pressure on SMEs,' he said in a statement on Tuesday. The key concerns are as follows: Disproportionate impact on SMEs: Unlike large corporations, small businesses operate on tight margins. A blanket enforcement adds to compliance costs without proportional benefit. Administrative Burden: The need to process, submit and pay for stamp duty on every employment contract creates extra red tape, especially for businesses with high staff turnover or seasonal employment. Impact on formalised contracts: Over-regulation in the hiring process may discourage small businesses from formalising contracts thus placing employees in rural and semi-urban Sabah into vulnerable position. SAPA's recommendations: Introduce a Threshold Limit: Exempt employment contracts for positions with monthly salaries below a reasonable threshold (e.g. RM4,000), in line with many other tax relief measures. Provide Full or Partial Exemption for Micro and Small Enterprises: Particularly those with annual revenue below RM500,000 or fewer than 10 employees. Phase Implementation with Outreach: This includes sufficient time to meet up with the new requirements and a new implementation date of 1 January 2026 and approach with education and support will ease compliance. SAPA strongly urges the Ministry of Finance and the Inland Revenue Board to engage with industry stakeholders in Sabah and other less-developed states before blanket implementation. Public policy must consider regional disparities, business realities, and the broader objective of stimulating employment and economic growth. 'We are confident that with constructive dialogue, a balanced policy solution can be achieved that protects both the interests of the government and the resilience of our local business community,' said Tan. He added the Stamp Act must be modernised to reflect current practical realities rather than remaining rooted in outdated and regressive approaches. While its original intent and purpose — to provide legal certainty and protect the interests of contracting parties — remain important, these objectives must be interpreted in the proper context. The Act should not be used in a manner that causes undue inconvenience or serves merely as a revenue-generating tool. In the case of employment contracts, for instance, such agreements have long been executed and honored by both employers and employees without issue. This consistent practice demonstrates mutual respect and understanding of contractual obligations, regardless of whether the documents were stamped. Insisting on strict adherence to outdated requirements, especially where there is no dispute between parties, undermines the spirit of the law and creates unnecessary administrative burdens, he pointed out. 'It is time for a balanced approach — one that preserves the protective function of the Stamp Act but updates its application to align with modern business practices and realities' he said. Previous Article UMS water supply sufficient, says Shahelmey
The Star
03-06-2025
- Business
- The Star
Sabah accountants urge rethink on stamp duty for employment contracts
KOTA KINABALU: The Sabah Association of Professional Accountants (SAPA) is urging the federal government to reconsider the blanket enforcement of stamp duty on all employment contracts. The group warns that the policy could burden small and medium-sized enterprises (SMEs), particularly in Sabah. While acknowledging the legal and fiscal rationale behind the Inland Revenue Board's directive, SAPA president Datuk Tan Kok Liang stated that the policy must consider the realities of doing business in less-developed regions like Sabah. "This requirement places additional administrative and financial burdens on employers, especially SMEs operating under constrained resources and geographical challenges," he said on Tuesday (June 3). He added that SAPA calls for a more balanced approach by exempting contracts with monthly salaries below RM4,000, offering exemptions to micro and small enterprises, and phasing in the policy with an implementation date no earlier than January 1 next year, alongside stakeholder engagement and educational outreach. Tan noted that the directive risks discouraging small businesses from formalising employment contracts due to overregulation and red tape. "This could inadvertently leave workers in rural or semi-urban Sabah vulnerable and without formal employment protection," he said. He added that while the Stamp Act 1949 was enacted for legal clarity and contractual certainty, its enforcement must evolve. "In practice, employment contracts have been respected by both employers and employees, with or without a stamp. Strict enforcement based on outdated provisions is counterproductive," he said. Tan then said that SAPA believes reforming the Stamp Act to reflect modern business practices is essential to prevent it from becoming solely a revenue collection tool. "We remain confident that through constructive dialogue, a balanced policy solution can be achieved, one that upholds the law while safeguarding local businesses and promoting employment," said Tan.
The Star
27-05-2025
- Business
- The Star
Sabah implementing policy to boost local accounting sector
KOTA KINABALU: The Sabah government has introduced a new policy to boost local economic participation in the procurement of audit and financial services by State Statutory Bodies and government-linked companies. Under the new guidelines, contracts for audit and financial services valued below RM50,000 must be awarded exclusively to Sabah-based firms registered with the Sabah Association of Professional Accountants (SAPA). For contracts exceeding RM50,000, priority must still be given to local firms, with exceptions allowed only upon written justification to the Ministry. On the guidelines, state Finance Minister Datuk Seri Masidi Manjun said that the policy prioritises appointing accounting firms domiciled in Sabah. He added that this marks a significant step in empowering local professionals and enhancing the state's accounting sector competitiveness. "This policy is not just about procurement; it is about creating real opportunities for Sabahans,' said Masidi. "We want our young accounting graduates to thrive in their home state, with economic growth driven by local expertise," he added. Masidi said that Sabah is ready to nurture and grow its professional class, especially in accounting and finance, which are vital to good governance and economic development. Meanwhile, SAPA president Datuk Tan Kok Liang expressed appreciation to the State Government, describing the policy as visionary. "We thank the Minister and the Sabah Government for this significant initiative. It represents a pivotal shift towards inclusive development and reflects a genuine commitment to strengthening Sabah's professional ecosystem," said Tan. During the meeting, Masidi presented certificates of membership to SAPA's first batch of 15 new members, symbolising the government's support for a strong and vibrant accounting community in the state.
