Sabah to introduce sales tax on gold, silver to boost revenue

KOTA KINABALU: Sabah is set to implement a sales tax on gold and silver next year as part of a strategy to increase revenue, state Finance Minister Datuk Seri Masidi Manjun said.

"Preparations to enforce the state sales tax on gold and silver are in their final stages and will be implemented in Jan next year," he said during his winding-up speech in the state assembly yesterday.

Masidi said the new sales tax will contribute approximately RM5.7 million next year to the state coffers, depending on the price and quantity of the two precious commodities.

Sabah, located on Malaysia's Borneo island, boasts an abundance of natural resources and raw materials, making it an attractive destination for investment. From lush rainforests teeming with biodiversity to vast marine ecosystems rich in marine life, Sabah offers a wealth of opportunities across various industries.

Masidi said in a bold attempt to diversify its revenue sources, Sabah had introduced sales taxes on five other products since 2022.

These include scrap iron and waste (Feb 1, 2022), ammonia and urea (Aug 1, 2022), methanol products (Oct 1, 2023), and most recently, silica sand/silica and palm oil biomass (April 1, 2024).

"As of October this year, these five products have collectively contributed RM226.01 million to state revenue," he said.

Meanwhile, as of the end of Sept, Sabah Development Bank (SDB) recorded RM4.89 billion in non-performing loans (NPLs).

SDB, however, said the NPLs are secured by collateral and that the recovery process could take three years.

Since Sept last year, SDB has launched legal proceedings against 21 borrowers with outstanding debts totalling RM2.56 billion, it said.