Kota Kinabalu: The State Government has introduced a State Sales Tax (SST) rate of 10 per cent on scrap metal exports to replace the previous SST rate of RM200 per metric tonne on scrap metal.
Industrial Development and Entrepreneurship Minister Phoong Jin Zhe said it was an alternative solution to address the issue raised by the Sabah Scrap Metals Recycle Association (SSMRA) and scrap metal dealers who have lamented that the previous rate was very burdensome to them.
He said after evaluating the issue from all aspects, it was found that the SST rate of RM200 per metric tonne was approximately 13 per cent above the current market price of scrap metal and regressive towards the sales value.
“Scrap metal dealers will be burdened if the international scrap metal market price drops because they have to pay the SST of RM200 per metric tonne.
“On the other hand, the Government’s revenue will not increase if there is an increase in the price of scrap metal at the international level.
“With this, the State Government has agreed to impose an SST rate of 10 per cent as it is found to be beneficial to both parties. Developing countries such as India and China are also doing this,” he said in a statement, Wednesday.
Additionally, Phoong said the State Government has agreed to make the London Metal Exchange and barchart as a reference to regulate and determine appropriate local scrap metal export prices.
He said the Industrial Development and Research Department (DIDR) has also been authorised to register all scrap metal collectors with weighing equipment and grant State Government Approval (SGA) licences.
“This approach plays an important role because it allows the State Government to develop a structured database for future reference. DIDR is given full authority to implement this.
“For SGA licence holders, they are required to update information in the database once a month and SGA licence renewal must be done every two years,” he said, adding that new initiatives were enforced on April 5.
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