‘Sales tax will make Sarawak’s petroleum products uncompetitive’

SARIKEI: The Pakatan Harapan (PH) federal government has claimed that the Sarawak government’s 5 per cent sales tax would make petroleum and petroleum products from Sarawak less competitive.

Finance Minister Lim Guan Eng said the tax would affect the marketing prospects of Sarawak’s petroleum and petroleum products.

“This is because additional tax will render petroleum products exported from Sarawak more expensive and less competitive compared to products produced in other petroleum-producing states,” Lim said in a reply to a question raised by Sarikei member of parliament Andrew Ong Ling Biu in Parliament recently.

Lim said the anticipated increase in the cost of petroleum and petroleum products due to the additional tax could also affect production in Sarawak.

However, he said the federal government had yet to feel the impact of the 5 per cent sales tax, which the Sarawak government imposed starting Jan 1.

Lim added it was premature to assume the impact of the tax and that he did not have details of the income generated by the Sarawak government from it.

According to Part 5 of the 10th Schedule of the Federal Constitution, additional sources of revenue assigned to Sabah and Sarawak include import duty and excise duty on petroleum products.

Chief Minister Datuk Patinggi Abang Johari Tun Openg had said that the tax levied on crude oil, natural gas, liquefied natural gas, chemical-based fertilisers, and gas-to-liquid products would generate RM3.897 billion this year.

He said the new source of revenue would be used to propel Sarawak’s development agenda.