Shafie speaks at the Warisan annual general meeting.
KOTA KINABALU (Dec 20): Excessive taxation is weighing heavily on businesses in Sabah, forcing some to close or relocate and putting jobs at risk, said Parti Warisan (Warisan) president Datuk Seri Shafie Apdal.
He noted that many companies in Sabah face multiple layers of taxes, which limit their ability to reinvest and expand.
Some businesses are required to pay substantial amounts upfront and then wait years for refunds, causing significant cash flow problems, he added.
“Companies need capital to grow. When the tax burden is too heavy, it discourages expansion and affects job creation,” he said at the party’s annual general meeting in Kolombong.
Shafie pointed to delays in tax refunds, saying they make it difficult for businesses to sustain operations.
He also criticised aggressive tax collection targets, stressing that enforcement should be guided by fairness and the actual capacity of businesses to pay, not by numerical goals or incentives.
He highlighted issues with the e-invoice and tax administration system, noting that businesses are often required to submit extensive documentation, much of which is incomplete or unclear, making compliance time-consuming and inefficient.
Shafie warned that some businesses have relocated to neighbouring countries with more business-friendly tax systems.
“When companies close, workers lose their jobs. Families lose their income,” he said.
He stressed that a fair and efficient tax system is essential for economic growth.
“Policies must support businesses. So they can continue creating jobs and contributing to the economy,” he said.
To ease the burden, Shafie called for practical tax reforms that support sustainable business growth.
“Taxes should be based on reasonable profits and allow companies to continue operating while contributing to national revenue. This will help create jobs and strengthen Sabah’s economy,” he said.
He urged the government to simplify the tax system, improve refund processes, and ensure fair enforcement.
Such measures, he added, would encourage investment, retain businesses in Sabah, and prevent job losses caused by over taxation.
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