Institute for Development Studies (IDS) director Zainnal Ajamain said this was provided for in the Federal Constitution.
As such, he said, Sabah would welcome the reinstatement of the sales and services tax (SST) but the implementation of the tax must be based on the constitution.
“Sabah already has a law to collect sales tax under the Sales Tax Enactment 1998.
“I don’t deny that the sales tax item is also mentioned in Schedule 9 of the Federal Constitution, but that item was specifically meant for the 11 states in the peninsula.
“Sabah and Sarawak have their own sales tax power, as stipulated under Schedule 10, Part 5, Item 7. The states’ sales tax would contribute to the states’ additional sources of revenue.”
He said these items in the constitution were needed to differentiate between federal sales tax and state sales tax so that there would be no double taxation.
“The federal government cannot say it is its right to collect the tax in Sabah or Sarawak. The Federal Constitution clearly rules that the tax is our right.
“I suppose they will use the Sales Tax Act 1972 to support their argument, but this is only for the 11 states in Malaya.
“We in Sabah should use our own tax enactment.”
Zainnal said although the Sabah Sales Tax Enactment was introduced in 1998, it was never implemented.
He added that the federal government had taken away Sabah’s rights when it took away the state’s revenue through the import and excise duties on petroleum products, when it introduced the specific tax under the amended Sales Tax Act 1972 in 1997.
Zainnal said Prime Minister Dr Mahathir Mohamad and Finance Minister Lim Guan Eng might display their “true colours” in whether they would obey the Federal Constitution on the matter.
He said representatives in Parliament from both sides of the divide in Sabah and Sarawak must also be watched to see if they would allow those in the federal government to take away the states’ rights.
“We want to see if our MPs know what they are talking about.
“I would like to send out this message to them that all political activists in both Sabah and Sarawak are watching them closely.”
Lim announced on Monday that under the reinstated SST, services would be taxed 6% and sale of goods 10% from Sept 1.
The rates are similar to those implemented before the 6% goods and services tax (GST) came into play on April 1, 2015.
The GST was zero-rated when the Pakatan Harapan government came to power after the May 9 general election.