Friday, January 1, 2010

DUN Sitting (Day Eight): Vessels can enjoy further sudsidised diesel extension, says Dr Chan

(Nov 10, 2010)

SOON, coastal vessels, tugboats, barges and others operating within Sarawak under the Controlled Subsidised Diesel Scheme (SKDS) can enjoy further subsidised diesel extension.

This followed a decision reached after a paper on the matter was tabled by the state’s Industrial Development Ministry at the Industries-Joint Committee (JBI) meeting last Oct 8.

The meeting, co-chaired by its minister Datuk Patinggi Tan Sri Dr George Chan and Deputy International Trade and Industry minister Datuk Mukhriz Mahathir also saw another paper touching on extension of tax exemption of shipping profits to ferries, tugboats, barges, lighters and others which operated within Sarawak under the Income Tax Act.

“Our main aim is to bring down the cost of transportation of goods, hence, the cost of doing businesses in the state in line with the changing needs and to enable our businesses to be more competitive,” said Dr Chan, who is also the Industrial Development Minister, when delivering his winding-up speech yesterday.

He added that due to its unique geographical factors, Sarawak depended heavily on coastal and riverine vessels as the main mode of transport.

These vessels played a very significant role in delivering goods such as food, machineries, construction materials and others to the numerous coastal towns and rural settlements in an economical and efficient manner.

However, Dr Chan stated that under the Merchant Shipping Ordinance 1952, ferries, tugboats, barges, lighters and others operating here were not treated similarly as in the case of other conventional Malaysian registered regular ships. 

Thus, under Section 54A of the Income Tax Act 1967, the said vehicles were excluded from tax exemption of shipping profits.

“In order to level the playing field for these shipping operators in Sarawak, we have proposed to the federal government to be more flexible and to relax the regulations by extending the tax exemptions for the said vessel categories which operate here.

“In addition, the Ministry strongly recommends that subsidised diesel under SKDS be extended to these coastal vessels, tugboats and barges as well. 

These coastal and riverine vessels need to be treated similarly as express boats, lorries and buses which currently enjoy such fuel subsidy so they can lower their costs of operations and hence, the cost of transportation of goods to coastal towns and rural settlements in Sarawak,” highlighted Dr Chan.

He also reiterated the ministry’s recommendations were justified because of Sarawak’s unique geographical factors and the lack of good linkages in the state. 

In such circumstances, these coastal and riverine vessels were playing a crucial and critical role in the livelihood of the rural communities, as well as the economy of the state.

“We hope that the federal government will consider our appeals favourably and grant us the necessary assistance,” he stressed.

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