Wednesday, August 25, 2010

Bottled water: Why Sarawak owners have to pay sales tax?

Bottled drink owners with Chong (front, second from left) at the press conference

KUCHING - While big bottled water companies in West Malaysia were spared from paying sales tax, Sarawak companies were slapped with a 10 percent sales tax since this year.

About half of the 15 such company owners in the state seek the help of MP for Kuching Chong Chieng Jen to put things right.

In a press conference Tuesday, Chong said he has written to the Custom and Excise Department and the Treasury Department to ask for refund to those who had paid up.

Chong said he is at a loss as to why these companies were taxed. “The drinking water is not taxable and the companies are not selling plastic bottles,” he said.

He said the basis of calculation of the said sales tax is unclear and ambiguous as even the tax department was unable to devise or formulate a method to correctly calculate the sales tax payable.

He pointed out that this is due to the fact that these companies do not sell bottle and thus there is no clear tax base on which to calculate the sales tax.

He wondered why Sarawak companies were imposed the tax while Peninsular Malaysia companies were spared. Chong said the plastic bottles are exempted under the Sales Tax (Exemption) Order 2008.

He urged the department to stop forcing drinking water producing companies to pay sales tax on the plastic bottles. And for those who had paid between RM2,000 to RM10,000 per month for the past few months, he urged the department to refund them.

Chong added that due to the economic downturn and the escalating cost of living, he said the department should not further burden the companies.

He said at the end of the day, the sales tax fall back on the consumers who were already suffering from so many price hikes.

Wednesday, 18 August 2010 00:00

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