DAP rep questions Sarawak’s ability to tax petroleum products

Sulok Tawie
Sarawak Chief Minister Datuk Patinggi Abang Johari Openg arrives to table the state Budget 2019 at the state legislative assembly in Kuching November 5, 2018. ― Bernama pic

KUCHING, Nov 8 – DAP’s Pelawan state assemblyman David Wong Kee Woan today expressed reservations that the state government would be able to enforce a 5 per cent sales tax on petroleum products starting next year.

He said this was because crude oil, natural gas and chemical-based fertilisers were exported outside Sarawak and not sold within the state.

“We should also not forget that the ownership of oil and gas has been sold to the Petronas (Petroliam Nasional Berhad) as per Petroleum Development Act 1974,” he said during the debate on the state Budget 2019 at the Sarawak state legislative assembly here.

In presenting the budget yesterday, Chief Minister Datuk Patinggi Abang Johari Openg had said that the state government was targeting to collect a sum of about RM3.897 billion from a sales tax on petroleum products next year.

Wong feared that the state budget might end in a large deficit if the state government was unable to enforce the sales tax on petroleum products.

He also asked if the state government had talked to all the stakeholders like Petronas, Shell, Asean Bintulu Fertilisers Sdn Bhd and others before tabling the state budget.

“How would the proposed sales tax be collected if the stakeholders of oil and gas industry in Sarawak refused to the proposed sales tax?

“Are we going to, for example, close down all the operations of these stakeholders if they refuse to cooperate?” he asked.

Wong said he could not imagine the consequences if the state government were to implement the sales tax without first talking to and getting understanding and consensus among all the major stakeholders.

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