The Sarawak government’s move to impose a 5% sales tax on petroleum products produced in the state will not only affect Petronas, but also the market, says Economic Affairs Minister Datuk Seri Azmin Ali.
He said the matter should be discussed further, as any increase in costs due to additional tax would lead to lesser demand as it would be more expensive than products produced in other oil-producing countries.
“Nevertheless, we respect the proposal which had been tabled and I am taking a proactive stand to discuss the matter further with the Sarawak state government,” Azmin said, adding that Petronas would also give its views on this.
He said this at a press conference after making a courtesy call on Sarawak Chief Minister Datuk Patinggi Abang Johari Tun Openg at his office at the Sarawak state legislative assembly building here on Wednesday (Nov 7).
Also present was Works Minister, Baru Bian.
According to Azmin, any increase in tax would have an impact on the production of petroleum products in Sarawak.
Abang Johari, who is also Sarawak Finance Minister in tabling the State Budget 2019 on Monday (Nov 5), announced that the state government would impose a 5% sales tax on petroleum products beginning January 2019.
In another development, the Economic Affairs Minister said the federal government would ensure that Sabah and Sarawak would not miss out on infrastructure development projects.
He said the federal and state governments have agreed to work closely together to ensure that infrastructure development such as utility projects and upgrading of schools in both states would continue.
In addition, he said the federal government had decided to continue with the Pan Borneo Highway project in both states, as the project would create economic opportunities.
He added that Abang Johari had in the meeting today assured that he would work on strengthening relations with the federal government.