Sarawak to collect RM3.88bil in state sales tax

Crude oil, liquified natural gas (LNG) and other petroleum products are expected to generate sales tax of RM3.16bil, according to Chief Minister Datuk Patinggi Abang Johari Tun Openg.(pic)

KUCHING: The Sarawak government is expected to collect RM3.88bil in state sales tax in 2022 to part fund its infrastructure development projects.

Next year’s total state revenue is projected at RM10bil, out of which, RM4.91bil or 49% will come from taxes.

Crude oil, liquified natural gas (LNG) and other petroleum products are expected to generate sales tax of RM3.16bil, according to Chief Minister Datuk Patinggi Abang Johari Tun Openg.(pic)

Sarawak was the first state in the country to impose a 5% sales tax on petroleum products in 2019. Up to September 2021, Sarawak has collected RM6.8bil from such taxes.

Petroliam Nasional Bhd made full settlement of some RM2bil in sales tax for 2019 in September 2020 after reaching a settlement on a dispute with the state authorities on the management of oil and gas extracted from the state.

In 2020, Sarawak introduced a 1% sales tax on aluminium products exported, and this is expected to bring in RM49mil for the state coffers in 2022, said Johari – who is also state Finance Minister – when unveiling the 2022 State Budget to lawmakers during a special meeting outside the state legislative assembly.

The state assembly session has been suspended as Sarawak is placed under the Emergency Order until February 2022.

Johari said RM600mil in sales taxes is expected from crude palm oil and crude palm kernel oil, RM320mil from forestry, RM60mil from lottery and RM5mil from tyres. Another RM600mil in raw water royalty, RM111mil from mining royalty, land rents and others are also expected to be collected next year.

Sarawak’s non-tax revenue for 2022 is estimated at RM4.84bil, out of which RM2.11bil will come from the 5% cash compensation in lieu of oil and gas rights or royalty on oil and gas from the federal government.

Other main revenue will derive from dividend receipts from investments (RM1.47bil), land premium (RM320mil), cash compensation in lieu of import and excise duties on petroleum products.

On the development expenditure, Johari said an estimated RM7.51bil will be provided in the 2022 state budget, out of which RM5.37bil will be allocated under the economic sector.

The bulk of the allocation or RM3.8bil is for commerce and industry such as state investment, state industrialisation programmes and tourism promotion.

The transport section will get RM1.2bil to fund projects like roads, bridges, riverine infrastructure and ports.

Johari said the on-going Sarawak Water Supply Grid Programme will get an alternative funding of RM1.5bil in 2022.

This ambitious grid programme involves water treatment plant, distribution network system, pipe replacement and upgrading work projects as well as non-revenue water management, modernisation and Sarawak alternative rural water supply project.

“The state will continue to expand the coverage of treated water and electricity supply throughout the state with an allocation of RM91mil next year.

“Among the projects are rehabilitation of Loji 1 at Batu Kitang, construction of water reservoir tank at Bukit Pancur and electricity supply project to schools which have yet to be connected to the state grid,” he added.

Meanwhile,Johari has announced an additional RM78.5mil under “Sarawakku Sayang Special Assistance (BKSS) 7.0 to help small and medium enterprises (SMEs) and micro enterprises to tide through the Covid-19 pandemic.

Some 24,600 micro enterprises will get a one-off financial assistance of RM3,000 each to be paid in December while about 470 active SMEs will receive RM10,000 each.

He said the state government had implemented seven BKSS packages thus far with 30 programmes and initiatives with total funding of RM5.3bil to support the business community and revive the economy.

Under BKSS 8.0, another RM285.5mil will be made available for financial assistance covering the first six months of 2022. The bulk or RM167mil will be for electricity bill discounts that will benefit 647,000 consumers.

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