Sabah imposes 5% sales tax on petroleum products

KOTA KINABALU: Sabah has imposed a 5% state sales tax on all petroleum products, say Chief Minister Datuk Seri Mohd Shafie Apdal.

He said all oil companies including Petronas had been informed of the state’s decision.

Shafie told reporters the plan to impose the state sales tax was always on the table and discussions were held with the previous federal government under Tun Dr Mahathir Mohamad.

He said the state had previously wanted 20% oil royalty as part of Sabah's rights to its resources.

“Dr Mahathir told me to hang on for a while because at that point, there were financial constraints (facing the country)," said Shafie.

The Chief Minister said he had also discussed the move with oil companies.

“So long as we have spelled out our plans, they are okay. They don’t want short term or u-turns in policies. They need us to be clear for them to plan properly, ” he said after visiting a movement control order (MCO) roadblock by authorities at the Jalan Kapayan here on Tuesday (April 7).

Asked if they (oil companies) were already paying, Shafie replied; “ I hope so.”

Earlier this month, a letter from the state Finance Ministry, signed by permanent secretary

Datuk Kaim Kalimin, informed oil companies of the move to impose a 5% sales tax on petroleum and natural gas products, effective on April 1.

The tax was being implemented under Section 10(1) of the State Sales Tax Enactment 1988.

Under the enactment, the petroleum companies were cautioned that they faced a RM50,000 fine or jail up to three years or both if they failed to comply.

Petronas was among nine petroleum companies which received the letter.

Sarawak had also imposed a state sales tax on Jan 1,2019 and Petronas on March 13, lost its bid for a judicial review of the decision.

The move by Sabah and Sarawak to impose the state sales tax follows the Federal Government’s reluctance to increase current oil royalties from 5% to 20%.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Sales tax , Sabah , Sarawak , petroleum products


Next In Nation

INTERACTIVE: How is Malaysia's Covid-19 booster rollout faring?
Johor polls: MCMC, telcos to facilitate high-speed Internet requirements, says Annuar
JPJ denies officers involved in 'flying licence' syndicate
Former Sarawak governor Tun Salahuddin passes away
Making it easier for public to vote
Almost half of adults given booster dose
‘Key to avoiding a huge spike is control, management’
How to hold elections during a pandemic
Electricity tariff relief continues
Bill to limit PM’s term to be tabled in Parliament

Others Also Read