No tax for intrastate flights in Sabah and Sarawak

The exemption is given after taking into account long distance between cities in the two states.

SHAH ALAM: The government today announced that all intrastate flights in Sabah and Sarawak would be exempted from the sales and services tax (SST) next month.

Finance Minister Lim Guan Eng said the exemption was given as most of the time air travel was the only practical option for travelling between cities in the two states.

“This will only work if you are flying from, say, Kuching to Bintulu or Miri, or from Kota Kinabalu to Tawau. But not from Kota Kinabalu to Kuching. Then you will still be taxed under SST,” he said.

He said no such exemption would be given for flights in Peninsular Malaysia, due to the relatively short travel distance between cities in a state.

“How many domestic airports do we have in one state? If you’re in Senai, Johor, where do you want to fly to in the state?” he said during a briefing with Customs director-general T Subromaniam today.

Later, Subromaniam told reporters that the tax exemption was given because Sabah and Sarawak have many domestics airports.

Meanwhile, Subromaniam said the Customs and the finance ministry have launched a programme to help businesses and traders register their companies under the MySST system.

He said since Aug 16 this year, a total of 77,451 businesses previously registered under the MyGST database were transferred to the MySST system, but said there were still glitches.

Businesses can apply for tax exemptions under SST once they register on the Customs portal online.

Lim said although they must do so before September, the government would adopt a soft approach, but warned that it did not mean businesses would be given leeway. - FMT