New tax law scrutinised over judicial review powers

The Star

3 days ago

Legislative agenda: Masidi (left) arriving at the Sabah State Assembly in Kota Kinabalu. — Bernama
KOTA KINABALU: The Sabah assembly passed sweeping amendments to a state tax law that strengthens collection and enforcement, amid concerns from lawmakers over its powers and potential to raise living costs.
Legislators from both the Opposition and backbench also questioned the inclusion of a clause in the Sabah Sales Tax Enactment (Amendment 2025) that limits the court's ability to review the tax rate and how it is collected.
State Finance Minister Datuk Seri Masidi Manjun said the amendments were to remove grey areas, plug loopholes and put in place a collection system that would benefit taxpayers.
Speaking during the winding up of the debates on the 37 amendments, Masidi said that the state had sought the assistance of tax consultants and the state Attorney General in drafting the amendments to ensure that the new system was fair and clear.
'They are meant to ensure that all processes are conducted strictly with transparency and accountability. It also gives taxpayers justice and ensures that their rights are protected,' he said.
During the debates, nominated assemblyman Datuk Yong Teck Lee (GRS-SAPP) raised concerns over an amendment to restrict judicial review, including on the amount of the tax.
'Last week, the Federal Court struck down a part of the Peaceful Assembly Act (PAA) because it was unconstitutional,' he said, referring to an apex court ruling that the requirement in the PAA to inform police before a rally was unconstitutional.
'I do not believe that our state assembly can limit judicial review,' he said.
In response, Masidi gave his assurance that the power of judicial review would be maintained and no law should be exempted.
'In this amendment, we have an appeal tribunal if someone is not satisfied. This makes the amendment more transparent actually,' he said.
He said the Sabah finance ministry, the tax collection agency and taxpayers will receive more clarity about the process.
'If they are unhappy, they can go to the tribunal court,' said Masidi.
In response to concerns raised by Yong and Jamil Hamzah (Warisan-Bugaya), Masidi said the enactment did not overlap with federal taxes and both governments have separate laws and powers.
State Opposition Leader Datuk Seri Mohd Shafie Apdal (Warisan-Senallang) questioned whether a new state tax would further burden the people.
Instead of introducing new state taxes, he said Sabah should pursue the Malaysia Agreement 1963 (MA63) promise that 40% of all federal tax revenue be returned to Sabah.
Shafie's concerns were echoed by Datuk Darell Leiking (Warisan-Moyog).
Also at the Sabah State Assembly, Assistant Minister to the Chief Minister Datuk Abidin Madingkir said the passing of the Climate Change and Carbon Governance Bill 2025 formalises Sabah's commitment to climate leadership and recognises its rare global status as a net carbon sink.
He tabled the Bill for its second reading yesterday, describing the legislation as a milestone.
The newly-passed Bill establishes a two-tier governance system led by the Sabah Climate Action Council and a director to oversee carbon governance and greenhouse gas emissions.
It also enshrines in law that all carbon rights belong to the state government.
Crucially, the Bill mandates greenhouse gas reporting, the creation of a climate fund and the involvement of indigenous communities, especially in carbon projects taking place on native customary land.
'This gives us a significant and strategic head start in an increasingly carbon-constrained global economy. This means Sabah has already gone beyond what the world is asking for under the Paris Agreement.
'We have already done our part for Malaysia's 2050 net zero commitment under that agreement,' Madingkir said.
He said the Bill provides a pathway for Sabah to lead nationally and internationally on climate governance, with full recognition of its constitutional rights over land, forests and water.