Sabah to stick to 5% sales tax on petroleum products, says Shafie

KOTA KINABALU: Sabah will stick with its 5% state sales tax on petroleum products despite Sarawak striking a deal with Petronas last week.

Chief Minister Datuk Seri Mohd Shafie Apdal said the tax, which was implemented last month, would continue as the deal between the Sarawak government and Petronas did not involve Sabah.

“We have an understanding with Petronas and other oil companies and we have informed them.

“I am in touch with the oil companies and we follow the rules and regulations. We are working closely with them on the sales tax, ” he said when asked if Petronas was seeking a similar deal with Sabah after they signed an agreement with Sarawak that is expected to restructure its 5% tax rate.

Shafie explained that the 5% state sales tax came into place after the promise to increase oil royalty from 5% to 20% did not materialise.

He said former prime minister Tun Dr Tun Mahathir Mohamad was

discussing the possibility of the state being given 20% stakes in

Petronas before Pakatan Harapan lost power in March.

“It did not materialise. The Petronas president is aware of it.

"We will pursue it, we have a good working relationship, ” Shafie told reporters after handing over Hari Raya cakes to security forces here on Thursday (May 14).

In the Sarawak deal, it was reported that Petronas had agreed to pay in full the petroleum products sales tax imposed by the state for the year 2019 that amounted to RM2bil in a resolution of a legal tussle between the state government and Petronas as well rights over the management of oil and gas assets in Sarawak.

Sarawak had also agreed that future petroleum products sales tax would be lower and staggered based on future negotiations, under the State Sales Tax.

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Sabah , Petrol Tax , Sarawak , Shafie Apdal , Petronas


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