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S'wak introduces 5pct sales tax on petroleum products in 2019 budget

Sarawak will continue with its development-biased and rural-focused budget to further stimulate economic progress with a proposed budget of RM11.914 billion for 2019, the biggest in the history of the state.

Chief Minister Abang Johari Abang Openg said, out of the total budget, an allocation of RM9.073 billion, including a federal fund of RM0.260 billion, was proposed for development expenditure and RM2.841 million was for operating expenditure.

Abang Johari, who is also finance and economic planning minister, said taking into account the estimated total revenue of RM10,513 billion and a total proposed ordinary expenditure of RM10.391 billion, the proposed 2019 budget was expected to generate a surplus of RM122 million.

"The state will continue with its expansionary fiscal policy with six key strategies and tapping into a new major revenue stream, including a five percent sales tax on petroleum products effective Jan 1," he said when tabling the Supply (2019) Bill at the Sarawak Legislative Assembly sitting in Kuching today.

He said next year's development expenditure estimates took into account high-impact and people-centric projects, particularly in the rural areas; commitment to complete the implementation of ongoing projects; capacity to implement projects and re-prioritisation of expenditure undertaken by the federal government to rationalise its fiscal position.

"For 2019, a sum of RM9.073 billion is proposed to finance various programmes and projects under the 11th Malaysia Plan, including socio-economic and rural transformation initiatives, walkabout projects and initiatives under the Digital Economy," Abang Johari said.

Of the total provision for development expenditure, he said RM8.813 billion would be funded by the state while RM260 million is to be financed by the federal government through reimbursable loans and grants.

He reiterated that the sales tax levied on petroleum products - crude oil, natural gas, liquefied natural gas, chemical-based fertilisers and gas to liquid products - was the state's rights as enshrined in the Federal Constitution.

On the federal Budget 2019, he said the allocation for Sarawak of RM4.346 billion was only 7.94 percent of the total development budget as compared with RM4.336 billion in 2018.

"The federal Budget 2019 does not reflect a fair and equitable allocation to Sarawak despite the promise made by the state Pakatan Harapan to make sure that Sarawak and Sabah will get 30 percent of the federal allocation," Abang Johari added.

For 2018, a total allocation of RM8.2 billion was announced for the state budget, comprising RM5.745 billion for development expenditure and RM2.4816 for operating expenditure.

- Bernama

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