Sales tax on petroleum products from Jan 1

Posted on : 06 Nov 2018  Source of News: The Borneo Post

Abang Johari (right) receives a copy of the speech for the State Budget 2019 from his principal private secretary Datuk Khir Busrah, at the State Legislative Assembly Complex in Kuching yesterday.

Sarawak will impose a five per cent sales tax on petroleum products effective January 1 next year as part of efforts to support its development agenda.

Chief Minister Datuk Patinggi Abang Johari Tun Openg said the five per cent sales tax will be levied on crude oil, natural gas, liquefied natural gas, chemical-based fertilisers and gas to liquid products.

“The revenue expected from the imposition of sales tax on these petroleum products is estimated to be at a sum of RM3.897 billion in 2019.

“The higher revenue expected from this new revenue stream together with the other sources of revenue as well as alternative funding will help to support the state in its undertakings on major development programmes and projects,” he said when tabling the Supply Bill (2019), 2018 at the State Legislative Assembly (DUN) yesterday.

Abang Johari noted that under Schedule 10, Part V(7) of the Federal Constitution, Sarawak is allowed to impose the State Sales Tax.

Under the State Sales Tax Ordinance 1998, the state currently imposes sales tax on crude palm oil, crude palm kernel oil, lottery tickets and tyres.

The decision to impose the sales tax, he said, is one of the solutions to fund infrastructure projects and basic amenities throughout the state which is lagging very far behind other states in Peninsular Malaysia.

The revenue gained from the sales tax, he pointed out, will enable the state to accelerate its development to be on par with that of Peninsular Malaysia; narrow the disparity gap between the urban and rural areas; improve the quality of life of the people especially the rural community; and achieve Sarawak’s vision to become a high income state by 2030.

“This fiscal flexibility would enable the state to manage its financial resources effectively and thus allow us to speedily implement more rural infrastructure, water and electricity supplies, internet, schools, clinics as well as agricultural and other economic programmes.

“We have a strong commitment to ensure that Sarawakians will no longer be deprived of basic needs and the opportunity to a better life and brighter future,” he remarked.