KOTA KINABALU (April 23): The Sabah government has not imposed state sales tax and the Royal Malaysian Customs Department has also not levied export duties on gold taken out of Sabah to Peninsular Malaysia, the Sabah State Legislative Assembly was told on Tuesday.

State Assistant Minister of Finance Datuk Julita Majungki said the transactions only involve domestic sales, and gold mining operations have been conducted at a 317.7-hectare site in Bukit Mantri, Tawau, since 2018. 

"A total of 2,300 kilogrammes (kg) of gold bars worth RM585 million were sold, and the state government has received a 5% royalty on the sales of raw gold, totalling RM23.96 million," she said.

She said this when replying to an oral question from Datuk Yong Teck Lee (appointed) regarding the sales tax and export tax imposed on gold taken out of Sabah.

Julita also answered an oral question from Datuk Seri Mohd Shafie Apdal (Warisan-Senallang), who wanted to know the government's actions to ensure Sabah does not suffer losses due to the loss of state revenue, following the seizure of 110kg of gold bars at the Tawau Airport last February.

She said the gold bars had been returned to the carrier and the Customs Department had confirmed that there were no violations of the Customs Act and/or subsidiary legislation under the Customs Act 1967.

To ensure optimum revenue collection, she said the state government, in collaboration with the Sabah Land Revenue Office (SUHB), the Land and Survey Department (JTU), Sabah Mineral Management Sdn Bhd (SMM), the Mineral and Geoscience Department, and the Customs Department, will improve the gold mining and smelting processes to be more transparent and effective.

Julita said Chief Minister Datuk Seri Hajiji Noor had appointed the JTU director as the chief inspector of mines, in accordance with Section 2, Sabah Mining Ordinance 1960 effective Jan 1, 2023, to administer the mineral administration system in Sabah and regulate mining operations.

Furthermore, an integrated steering committee has been established to monitor gold mining operations by introducing a three-key system for monitoring activities held twice a month.

The state government, through JTU and SUHB, in cooperation with SMM, will also strengthen law enforcement and regulations related to mineral mining activities, based on the Sabah Mining Ordinance 1960 and Land Ordinance Chapter 68, through the empowerment of the supervision framework.

This is in line with Section 28 of the Mining Ordinance 1960 to introduce new regulations for more efficient mining operations, and compliance with the environmental, social and governance (ESG) concept.

"The state government will also review contract agreements and related ordinances/acts/enactments to increase the gold royalty rate from 5% to 10% on raw gold produced from these mining activities.

"We will also consider imposing state sales tax on gold taken out of Sabah," she said.

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