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Bill to increase State revenue
Published on: Friday, December 01, 2023
By: Sherell Jeffrey
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Bill to increase State revenue
Hajiji and Joachim at the State Assembly sitting.
Kota Kinabalu: The Sabah Legislative Assembly on Thursday approved a Bill that strengthens the State Government’s authority to levy fees and charges, with the aim of generating revenue for the State Government. 

Deputy Speaker Datuk Richard Yong passed the Bill – Fees (Amendment) Enactment 2023) – tabled by Assistant Minister to the Chief Minister Datuk Abidin Madingkir. 

The amendment broadens the authority of the State Government to levy fees and charges on a range of matters beyond List 2, encompassing other areas outlined in the Federal Constitution. This measure is intended to generate revenue for the State Government.

“The Bill aims to amend Section 2 of the Enactment by removing the requirement that fees or charges imposed or set are limited to matters included in the State List of the Federal Constitution,” said Abidin when tabling the Bill. 

Apart from the amendment to Section 2, the other amendment made is to replace the word “Yuran” in the Enactment to the word “Fi”.

The Fees Enactment 1981 was tabled and approved by the State Legislative Assembly on Aug 13, 1981 and came into force on Sept 3, 1981. 

The Enactment was enacted with reference to the Fees Act 1951 which was in force at the Federal level at that time. 

The purpose of the Enactment, among others, is to provide that the Head of State may by order from time to time levy and prescribe fees and charges levied or to be leviable in public offices and State Government departments unless it has been expressly provided otherwise by any written law in force in Sabah. 

However, the Enactment under Section 2 imposes a condition that the fee or payment to be imposed or prescribed is only in respect of any matter included under the State List which is List 2 in the Ninth Schedule, Federal Constitution. 

The conditions imposed under Section 2 of the Enactment were found to be inappropriate and restrict the State Government from exercising other jurisdictions as provided for in the Federal Constitution.

“The jurisdiction of the State Government provided under the Federal Constitution is not only limited to List 2 or the State List only. The State Government also has jurisdiction in other lists of the Ninth Schedule,” said Abidin. 

List of the following items: 
  • List 2A which is the Addendum to the State List for Sabah and Sarawak, such as matters relating to customs and natives;
  • List 3 which is the Concurrent List, such as matters relating to drainage and irrigation
  • List 3A which is an Addendum to the Concurrent List for Sabah and Sarawak, relating to shipping weighing less than 15 registered tons; 
  • Residual Power under Article 77 of the Federal Constitution, such as matters concerning the environment.

Abidin said the proposed amendment would grant the State Government more authority to levy fees and charges on a wider range of matters, not just those listed in List 2.

This expansion aims to generate additional revenue for the State Government by including jurisdictions from other lists under the Federal Constitution.

According to him, the Bill does not require any extra funding from the State Government. 

Nominated Assemblyman Datuk Seri Yong Teck Lee when debating the Bill raised a question about the Residual 

Powers granted to the State Government by the Federal Constitution regarding fee collection.

“Apart from the mentioned items such as the Native Court, is this enactment in any way related to the State Government’s collection of fees under the Malaysia MySecond Home (MM2H) or Sabah Malaysia MySecond Home (SMM2H) scheme? This topic has been widely discussed, questioning the government’s authority to collect fees under existing laws. 

“Additionally, there is the matter of the financial impact. Does this amendment enable the government to collect fees or impose new fees?” said Yong inquiring about the anticipated amount of new fees to be collected in the upcoming financial year attributed to this amendment. 

Abidin responded by saying that Sabah has the authority over the items listed in the State List and Concurrent List. 

“Our concurrent list holds equal authority to that of the Federal Government.

“However, as mentioned earlier, we also possess powers granted under List 2a, which supplements the State List, as well as List 3, which is a Concurrent List provided to the State Government.

These additional powers complement the powers granted under the State List and Concurrent List. 

“Once the Bill is approved, the State Government will engage in discussions with relevant parties, including the State Attorney Chambers and the Ministry of Finance, regarding the compilation of items and activities that may incur fees. 

“As for the amount collected, we currently do not have that information available. We will notify the YBS once we have it,” he said. 

At that juncture, Yong stood up and asked to clarify his point. 

“Firstly, is the amendment in any way connected to MM2H or SMM2H? If yes, just say yes. If at the moment no, just explain no,” he said. 

He pointed out that it is important for both members of the House and the public to have clarity on whether this new power to collect fees includes MM2H or SMM2H as this will ensure transparency and understanding.

Additionally, Yong said it is important to note that with the implementation of new fees, it is assumed that the government has already identified specific items on which these fees will be levied, and has also planned for future items in the years to come. 

“Could you please provide me with a list of the items you can collect and their estimated amounts? Is that the case? Or is it possible that you are seeking a clause that would provide flexibility for the government to impose new fees on new items in the future, either under the Concurrent List State and Federal or under the State List? I just want to know that. 

“Do you have specified list of items you want to collect fees? If so, how much? If YB Minister has an answer, answer it. What is more important is whether this Bill includes the MM2H or SMM2H, that’s all.” 

Abidin in response said “Any administrative fee can be collected on the implementation of MM2H if it is later prescribed by the State Government. It can be done. Only administrative fees can be charged. 

“The MM2H is under the jurisdiction of the Federal Government which is under the Immigration Act,” he said.

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