Abang Johari: No multi-layer sales tax on petroleum products

Sarawak Chief Minister Abang Johari Openg says the sales tax is only imposed on petroleum products exported. (Bernama pic)

KUCHING: Sarawak Chief Minister Abang Johari Openg today clarified that only the export sales tax will be imposed on petroleum products.

Clarifying that there would be no multi-layer sales tax on petroleum products, he said there was a lot of misunderstanding on the export sales tax for petroleum and gas product,s which was announced in the state assembly last month.

“People in the industry interpreted that raw materials (sold) to the liquefied natural gas (LNG) plant will be taxed at 5% and there will be another 5% tax when the LNG is produced and exported, which is not the case.

“The sales tax is only imposed on products exported,” he told reporters here today after witnessing the signing of a sale and purchase agreement between Petronas Chemicals Marketing (Labuan) Ltd and Sarawak Petchem Sdn Bhd to market methanol products from the Sarawak Methanol project.

Sarawak will impose a 5% sales tax on petroleum products, from Jan 1, 2019, as a new source of revenue to support the state’s development agenda.

The tax will be levied on crude oil, natural gas, liquefied natural gas, chemical-based fertilisers and gas-to-liquid products, generating an estimated revenue of RM3.90 billion for Sarawak.

Meanwhile, the chief minister said the government was working on a proposal to only build a Light Rail Transit (LRT) system for the Kuching-Kota Samarahan route.

Abang Johari said the proposed LRT project would be scaled down and a study was under way to determine the cost.

“There have been requests from the people in Samarahan to build the LRT and we have to look at the project again,” he added.