Sabah Poised To Collect RM1.25 Bln Sales Tax From Petronas Next Year

KOTA KINABALU: Sabah Deputy Chief Minister Datuk Dr Jeffrey Kitingan said the state government is expected to collect five per cent oil and gas sales tax from Petroliam Nasional Bhd (Petronas) amounting to RM1.25 billion next year.

Jeffrey, who is also in charge of the Agriculture and Fisheries portfolio, 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 the national oil and gas company so it was not included in the Budget 2021 announcement. However, we may include it in our state budget,” he said in a statement tonight. 

Besides Petronas, he said, the state government would also collect five per cent sales tax from other oil and gas companies operating in Sabah.

Jeffrey said this meant Sabah would have more funds to spend, translating to more rapid infrastructure development, human resources development, and economic development.

On top of that, he said the state government had written a letter to Muhyiddin asking for a RM500 million token as part 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 per cent of net revenue derived by the Federal Government from the state.

Jeffrey said the RM500 million token would be better than the Pakatan Harapan (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 Sabah,” he said.