PETRA JAYA: Chief Minister Datuk Patinggi Abang Johari Abang Openg today assured that the imposition of the five per cent sales tax on petroleum products will not burden the people and business community.
The sales tax, effective on Jan 1 next year, he said, would have no impact on the cost of living and the businesses, not as claimed by the Pakatan Harapan leaders.
“I wish to make it clear that the petroleum products which are consumed locally are not significant in volume. Furthermore, these petroleum products that are to be sold locally shall be exempt from the sales tax,” he said.
Citing an example, Abang Johari said, when the sales tax was imposed on crude palm oil and crude palm kernel oil, it did not lead to the increase in the price of cooking oil.
When delivering his winding up speech at the Sarawak Legislative Assembly (DUN) sitting here today, he told the industry players in the oil and gas related business that imposition of sales tax was the right of Sarawak that ought to be recognised.
On the concern that the sales tax will impact Petronas financially, the Federal government has the power to review the rate of Petroleum Income Tax on income of Petronas and other players in the industry, he said.
He added that the decision to impose five percent sales tax on petroleum products was conferred by the Federal Constitution as in Schedule 10, Part V, Section 7.
“Hence, it is constitutionally legitimate for the State to impose State Sales Tax.”
The Chief Minister said the State Sales Tax Ordinance 1998 allowed the State to impose sales tax on goods and services and was applied on sale value.
“The introduction of the new sales tax is on the same basis as that of the Federal government exercising its right on the imposition of Sales and Services Tax (SST) pursuant to the Federal Constitution.
“Our effort to levy on sales tax is also in the same spirit of the Federal government to strengthen financial capacity. Sarawak needs more revenue to enhance its financial capacity to fund all the much long awaited and needed basic infrastructure and amenities for the well-being of our people,” he said.
” We have been deprived from enjoying better quality of life for more than half a century despite the fact that the State of Sarawak is the biggest oil producing State in Malaysia. What an irony!
“Therefore, it is time for us to take control of our own destiny and boldly move on with our development agenda, ” he added.
Abang Johari, who is also the state’s finance minister, also announced a one and half month bonus of the basic salary or a minimum of RM2,000 for the State civil servants to be paid by end of December.