State to impose sales tax on aluminium products and increase raw water rates starting Jan 2020

Taxes. — DayakDaily.com file pic. // Photo: Pixabay

KUCHING, Nov 4: The Sarawak government will impose State Sales Tax (SST) on aluminium products and increase raw water rates with effect from January 1, 2020.

Announcing this during his Sarawak Budget 2020 speech, Chief Minister Datuk Patinggi Abang Johari Tun Openg said the state government has made concerted efforts to expand its revenue stream through re-engineering of its revenue base in order to maintain its development momentum and keep up the accelerated pace of development especially in rural areas which require substantial amounts of funding.

“The state has decided to implement levy of one per cent on aluminium products that are exported out of Sarawak and revise the tariff for abstraction of raw water from one cent per cubic metre to 2.5 cent per cubic metre,” Abang Johari said at the Sarawak Legislative Assembly (DUN) here today.

However, the increase in the tariff rate will only affect power and water supply providers.

“I would like to highlight here that the electricity and water charges for consumers and residential (consumers) will remain unchanged,” he explained.


The state has projected revenue collection of RM10 billion for 2020.

Abang Johari further explained that tax revenue is expected to reach RM4.6 billion or 43 per cent of the total expected revenue, comprising RM3.491 billion from SST of which RM2.878 billion will come from crude oil, liquefied natural gas and other petroleum products while another RM445 million from crude palm oil and crude palm kernel oil.

Meanwhile, the lottery tax will yield about RM80 million, aluminium products RM58 million and the remaining RM30 million will come from the tax on tyres.

Revenue from raw water royalties is expected to yield RM600 million, while RM413 million will come from forestry of which RM229 million is expected to come from forest royalties and RM184 million from timber premiums and tariffs.

A total of RM127 million will come from mining royalties, land rent and other sources.

Meanwhile, non-tax revenue which is estimated to reach RM5.188 billion or about 53 per cent of total expected revenue will be derived mainly from five per cent cash compensation in lieu of oil and gas rights or royalty on oil and gas (RM1.839 billion), dividend income (RM1.784 billion), interest income (RM1.058 billion) land premium (RM250 million), cash compensation in lieu of import and excise duties on petroleum products (RM120 million) and RM137 million from other sources, such as licences, service fees, permits and rentals.

Abang Johari added that federal grants and reimbursements are expected to amount to RM239 million while non-revenue receipts mainly from forest liquidated damages, disposal of assets, and forest compounds is expected to reach RM9 million. — DayakDaily