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KUCHING: The state government’s proposed 5% sales tax on petroleum products may adversely impact the competitiveness of these products in Sarawak, Economic Affairs Minister Datuk Seri Mohd Azmin Ali said.
Any cost increase through the imposition of the additional tax would cause these products to be no longer attractive as they would become more expensive than similar products from other oil-producing states, he said.
“If this happens, it may have an effect on the production of these products in Sarawak,” he told reporters after paying a courtesy call on Chief Minister Datuk Patinggi Abang Johari Tun Openg at the Sarawak Legislative Assembly complex here yesterday.
Azmin said the proposed sales tax was not brought up during his meeting with Abang Johari but he would discuss the matter with the state government.
“We respect the state government’s proposal and I will take a proactive stand to discuss it further.
“Of course there are some concerns expressed by Petronas but this matter will be discussed with the state government,” he said.
When tabling the state budget on Monday, Abang Johari said the state government would impose the 5% sales tax on petroleum products starting next year as a new source of revenue for the state’s development agenda.
Abang Johari said the tax, to take effect on Jan 1, 2019, would be levied on crude oil, natural gas, liquefied natural gas, chemical-based fertilisers and gas-to-liquid products, and is estimated to generate a revenue of RM3.897bil.
Azmin also said matters related to state-federal cooperation and development in Sarawak were discussed in the courtesy call.
“I’m happy the Chief Minister gave assurance that it is the stand of the state government to strengthen cooperation with the federal government. I believe such cooperation will help both sides to develop Sarawak and also Malaysia.
“We also discussed development matters in Sarawak, in particular infrastructure, utilities and schools,” he added.
Azmin also welcomed Sarawak’s move to set up a consultative committee to advise its representatives on the steering committee of the Malaysia Agreement 1963 (MA63).
“This is in line with the decision by the federal government to ensure that Sabah and Sarawak will be well represented in the committee to review and discuss the implementation of MA63,” he said.
The state assembly on Tuesday unanimously approved a motion to set up the consultative committee, which will provide recommendations on safeguarding Sarawak’s rights, interests and position according to MA63 and the Federal Constitution.
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