Kota Kinabalu: The State Assembly passed the Sales Tax (Amendment) Bill 2025, aimed at strengthening the State’s taxation framework and improving revenue governance.
State Finance Minister Datuk Seri Masidi Manjun, in tabling the Bill, said the amendments were part of a broader effort to modernise the State’s revenue system and make it more transparent, accountable and effective.
He said the 37 proposed amendments were not just technical updates, but part of a holistic strategy to ensure Sabah’s tax laws remained responsive and fair in today’s dynamic economic environment.
window.googletag = window.googletag || {cmd: []};googletag.cmd.push(function() {googletag.defineSlot('/22826383987/dailyexpress_inline', [1, 1], 'gpt-passback').addService(googletag.pubads());googletag.enableServices();googletag.display('gpt-passback');});“With the passing of this Bill, we hope to better manage state revenue while preserving trust and cooperation with taxpayers. We are not just waiting for taxes to be paid — we are actively tightening the system and protecting taxpayers’ rights,” he said.
Masidi assured that the Government had conducted extensive consultations with tax experts, including top lawyers in Kuala Lumpur and Sabah’s Attorney-General, before finalising the proposed changes.
“I want to make it clear that there are no new taxes under this amendment. What we’ve done is bring clarity. The grey areas have now been clarified, benefiting both tax collectors and taxpayers,” he said.
He added that under the revised law, the introduction of a tax appeals tribunal will give taxpayers more avenues to challenge decisions they deem unfair, making the system more transparent.
“Judicial review cannot be excluded from any law. It will always be there,” he said in response to concerns about attempts to restrict court oversight.
During the debate, Nominated Assemblyman Datuk Seri Yong Teck Lee raised strong concerns over the clause seeking to limit judicial review, calling it constitutionally questionable and warning that it could face legal challenges.
“This law, even if passed, is standing on shaky ground,” Yong said, referring specifically to the restriction on judicial oversight. “If we legislate badly today, we might end up in court tomorrow.”
Kapayan Assemblywoman Datuk Jannie Lasimbang also debated the Bill, saying she supported it in principle but cautioned against several provisions she said could disadvantage taxpayers, particularly those with limited resources.
She pointed to Section 17, which requires taxpayers to pay first before filing a legal appeal, describing it as a “pay first, argue later” principle that undermines the right to justice.
Jannie also questioned the broadened definition of “negligence” and the Government’s expanded anti-avoidance powers, warning that these could penalise genuine business transactions and create long-term uncertainty.
In addressing these concerns, Masidi stressed that the overall goal of the amendment was to ensure clarity and fairness.
He said businesses would ultimately benefit from reduced compliance costs as they would now know precisely what is taxable.
“There is no overlap between federal and state taxation. These are separate jurisdictions,” he added.
The Bill was passed by a voice vote following the debate.
