5 pct sales tax on petroleum products helps ramp up state revenue — CM

E11 Platform Complex, Baronia oilfield in Miri. — file pic

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By Peter Sibon

KUCHING, May 9: Sarawak government has started receiving the 5 per cent sales tax on petroleum products, which has contributed to the RM2 billion revenue in the first quarter of this year, revealed Datuk Patinggi Abang Johari Tun Openg today.

“Yes, we are collecting the sale tax. That’s why you noticed that our first quarter revenue is over RM2 billion. This also includes other commodities as well,” he told reporters after delivering his winding-up speech at the State Assembly (DUN) here today.


Last year, when tabling State Budget 2019, the chief minister projected that the state’s income from the 5 per cent sales tax on the export of oil and petroleum products would be around RM3.9 billion.

Earlier, in his winding-up speech, Abang Johari, who is also Minister of Finance, pointed out that the imposition of the sale tax was one of the measures taken to enable the state to have a more equitable share of the revenues yielded from oil and natural gas produced in Sarawak.

Meanwhile, he reiterated that the state government would not shirk its responsibilities to defend the state’s constitutional rights.

“The state government’s record in defending the legitimate interests of the state and our people is truly exemplary and as a matter of public record, I would like to highlight a few instances where the state government had prevented efforts to undermine our constitutional rights and safeguards.

“In 1966, Parliament passed the Continental Shelf Act, 1966, and the Petroleum Mining Act, 1966, aimed at taking control of the continental shelf and the exploration of mining of oil and gas within the boundaries of Sarawak.

“The state government objected to the extension of these two Acts to Sarawak, resulting in those laws being applied only to West Malaysia from July 20, 1966. However, our efforts were thwarted by the Federal Government using the Emergency powers to extend the laws to the state in 1969,” he said.

However, he said since the Proclamation of Emergency had been annulled by both Houses of Parliament in December 2011, the laws made under emergency powers had ceased to have effect under Article 150(7) of the Federal Constitution and the extension of the Petroleum Mining Act, 1966 and the Continental Shelf Act, 1966 also ceased to have effect.

“The state government has, therefore, proceeded to enforce the Oil Mining Ordinance,1958, to regulate oil mining both onshore and offshore of Sarawak.

“By taking such measures, the state government through Petros is determined to have regulatory control of offshore mining and equity participation in existing oil and natural gas fields and future exploration and mining areas offshore. At the same time, Sarawak will want to have full control of onshore mining before the end of this year,” he added.

On a related issue, the chief minister said, in 1983, Parliament passed the Perbadanan Pembekalan Letrik Sarawak Act 1983 (Cap.279).

“The intention was for the federal government to take over Sarawak Electricity Supply Corporation (Sesco). This was despite the Borneo States (Legislative Powers) Order, 1963, made by the Yang di-Pertuan Agong under Article 95C of the Federal Constitution, which extended the legislative authority to include electricity and distribution of gas to the state.

“Unlike Sabah, the state government refused to relinquish its legislative authority and hand over Sesco to federal control.

“Today, Sesco under Sarawak Energy Berhad (SEB) is the pride of Sarawak and is one of the biggest local companies in terms of capitalisation, supplying energy at the cheapest tariffs in the Asean region, attracting many investors to the state,” he added. — DayakDaily