KUCHING, Nov 5 ― The Sarawak state government will impose 5 per cent sales tax on all petroleum products next year, Chief Minister Datuk Patinggi Abang Johari Openg said today.
“This will take effect on January 1 next year,” he said when tabling the state Budget 2019 in the state legislative assembly.
He said the sales tax will be levied on petroleum products such as 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 a sum of RM3.897 billion in 2019,” he said.
Abang Johari added that the higher 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 under Schedule 10, Part V(7) of the Federal Constitution the state is allowed to impose state sales tax.
“Under the state Sales Tax Ordinance 1998, the state imposes sales tax on crude palm oil, crude palm kernel oil, lottery tickets and tyres, and this has been a good source of state revenue,” he said.
The chief minister said that after 55 years of independence, Sarawak was still lagging very far behind in its development compared to the peninsula.
“It is saddening indeed to see that the people of Sarawak have not been able to enjoy good quality of life with the necessary infrastructures and amenities, particularly our rural community.
“Sarawak, therefore, has not much choice, but to be self-determining in its development efforts to undertake these massive works ahead of us,” he said.
He said such efforts include putting the state's infrastructure and basic amenities in place, be it roads and bridges, provision of water and electricity supplies and education, healthcare and many more.
He said the state has to determine and take control of its development agenda in a more concerted and self-determining manner and it ought to resort to a more radical solution.
He said one of the solutions is to find a way to fund these much long awaited infrastructure projects and basic amenities throughout the state.