STAR tells Sarawak to raise sales tax on oil to 20pc

Sulok Tawie
Chief Minister Datuk Patinggi Abang Johari Openg holds a copy of the Sarawak Budget 2020 in Kuching November 4, 2019. — Bernama pic

KUCHING, Nov 5 — State Reform Party (STAR) president Lina Soo today said the state government should have proposed to increase the sales tax on the export of petroleum products from 5 per cent to 20 per cent in the state’s Budget 2020.

“As the federal government is collecting petroleum tax (PITA) from Petronas at 38 per cent to 45 per cent, apart from the dividends, other taxes and income it imposes, it is not unreasonable for Petronas to pay 20 per cent state sales tax,” Soo said.

“This will project the four-fold increase in revenue from RM3.491 billion to RM139.64 billion. After all, it is our oil and gas which belongs to the people of Sarawak and we have been languishing in poverty for too long,” she said when commenting on the state Budget 2020 tabled by Chief Minister Datuk Patinggi Abang Johari Openg in the Sarawak State Legislative Assembly yesterday.

She said the revenue generated from the increase in the sales tax could be used to pay for the state’s development to ensure the prosperity and happiness of the people of Sarawak.

Soo noted that Sarawak collected RM5.653 billion in the first three quarters of 2019 and the shortfall seemed to be partly due to the failure of Petronas to pay the 5 per cent state sales tax on petroleum products.

“A Notice of Assessment has been issued to Petronas to pay the sales tax but the public is kept in the dark on the amount of tax involved and when is the deadline due.

“If there is a deficit for 2019, will state reserves be utilised?” she asked. 

Soo asked what corrective measures the Sarawak government will take to boost public confidence in the state Budget tabled for 2020.

On the Budget proposals, she said there is nothing much to talk about, saying that it is a little more of the same where some of the items appear to be recycled from this year’s Budget.

“One case is the Sarawak Digital Economy Strategy 2018-2022 which has not seen much progress in the sectors of precision agriculture, industry 4.0, tourism, smart city, e-commerce and digital government as touted, despite RM750 million being spent, with another RM400 million budgeted for 2020, with not much to show so far,” she said.

On the RM450 financial assistance to women for post-natal care, she said this is a good initiative, but stressed that the amount is too small and insufficient for a mother during confinement period where she has to build up her strength after nurturing and carrying an extra seven pounds for several months. 

“Adding another zero to make it RM4,500 would have been a more realistic figure especially when Sarawak is underpopulated for its landmass, and the extra money would go towards better nutrition for post-natal care of the mother,” Soo suggested.

She said the Endowment Fund for newborn babies at RM1,000 is hardly adequate as calculated at 3 per cent per annum compound interest, the maturity sum is RM1,702.43 at age 18, an amount which has less purchasing power than before, after taking inflation into account.

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