KUCHING: Professionals and politicians were unanimous in welcoming the state’s decision to introduce a 5 percent sales tax on petroleum products in Sarawak beginning January 1 next year.
They felt the time was ripe that Sarawak should stop begging from the Federal Government but instead, look at other practical and sustainable options to be more financially independent.
Political secretary to the Chief Minister Michael Tiang, a lawyer by profession, opined that the sales tax marked a forward step taken by the Sarawak government towards self-determination in terms of fiscal directions and management.
He said as part of an effort to widen the state’s revenue base, the sales tax was a step in the right direction.
He described the RM3.897 billion revenue expected to be made in 2019 as a ‘handsome’ sum.
He further said the imposition of the new sales tax showed that the Sarawak government was determined in its effort to reclaim the state’s rights as enshrined in the Malaysia Agreement 1963 (MA63).
He said the sales tax was in line with the establishment of Petros and the amendment of the Oil Mining Ordinance in the last State Legislative Assembly sitting in July.
“Under the Tenth Schedule of the Federal Constitution, it is Sarawak’s autonomy to impose sales tax on petroleum products and constitutionally, the state has the right to impose a sales tax up to a rate of 10 percent on petroleum products, but the state apparently chose to introduce this new sales tax at the rate of 5 percent instead,” he added.
On speculation that the new sales tax might turn out to be another burden on the people, particularly Sarawakians, Tiang said it was unfounded.
This was because the sales tax would be imposed on export products that are non-consumer products like crude oil, liquefied natural gas and chemical based fertiliser, he said.
“I applaud the Chief Minister and his Cabinet for taking this bold step. It is a loud statement to declare our rights in action as well as to turn our rights into revenues for the betterment of the state,” he added.
Geologist Nathan Achute, meanwhile, said the tax was one way to realise the potential and maximise the economic benefits of Sarawak’s depleting natural resources, especially oil and gas.
Nathan, however, hoped that the extra revenue would translate into equitable development for all communities.
“I am very sure the State Government has worked out a suitable mechanism to ensure the tax does not have any adverse impact on the price of petroleum related products in Sarawak.
“We are looking forward to seeing better days ahead for Sarawak with this move,” he added.
Lawyer Wilfred Yap described the new tax as “a proactive step taken by the Sarawak government under the Chief Minister”.
According to him, Sarawak cannot rely heavily on the Federal Government for development funds as can be seen from the meagre RM4bil provision in the federal budget.
He said the additional RM3.897 billion would help the state accelerate development towards making Sarawak a fully developed state by 2030.
Tan Kai, who is also a political secretary to the Chief Minister, said the extra revenue from the new tax was needed to ease the shortfall caused by the cancellation of many federal projects in the state.
Tan Kai said: “It is a good move by the Chief Minister. Sarawakians will not suffer from the empty promises of Pakatan Harapan.”
