KOTA KINABALU: The Sabah government would collect the 5% sales tax on oil and gas from Petronas, which could amount to RM1.25 billion starting next year.
In a statement released here today, Deputy Chief Minister Datuk Seri Panglima Dr Jeffrey Kitingan said the issue had been brought to the attention of Prime Minister Tan Sri Muhyiddin Yassin who had agreed on the matter.
“The RM1.25 billion will come straight from Petronas and thus, not included in the Budget 2021. However, we may include it in our state budget,” he said.
Moreover, he said the state government would also collect the 5% sales tax from other oil and gas companies operating in Sabah.
The good news means Sabah would have more funds to spend, translating to more rapid infrastructure development, human resources development, and economic development in the state.
On top of that, he said the state government had written a letter to the Prime Minister Tan Sri Muhyiddin Yassin asking for a token RM500 million as part of the fulfilment of the federal government’s constitutional obligation.
Under Schedule 10, Article 112C of the Federal Constitution, the federal government is obliged to give Sabah 40% of net revenue derived by the federal government from the state.
Jeffrey said the RM500 million is better than the PH government’s ‘settlement’ of RM53.4 million special grant for Sabah.
“The previous agreement between the Warisan-led Sabah government and the PH-led federal government was flawed.
“A paltry sum of RM53.4 million for the next four years and RM106.8 million in the fifth year means we do not have any room to re-negotiate the amount for the next five years.
“This could result in huge losses in revenues for the State.
“Since the federal government had reverted to the original RM26.7 million, we can go back to the discussion table and demand a much higher amount. It is our rights, after all.
“More importantly, it would also give us the opportunity to rectify the grave mistake of the Warisan government,” he said.-pr/BNN
