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Malaysia – CM: Petroleum sales tax expected to yield RM50m monthly revenue for Sabah
KOTA KINABALU, April 21 — Sabah is expected to collect an estimated RM50 million monthly revenue from the new petroleum product sales tax implemented as of this month.
Chief Minister Datuk Seri Shafie Apdal said that the state is expecting to collect its first payoff on or before May 28 for sales in April from at least seven of the nine petroleum companies with which it has a production sharing contract.
“The estimated price is based on the output of oil and gas in 2019 and assuming prices stay at around US$24 per barrel for crude oil and US$1.80 million British thermal unit for gas.
“If prices for oil and gas go up, we can collect more,” he said during his winding-up speech at the State Assembly sitting today.
Sabah recently set April 1, 2020 as the date it would impose a sales tax of 5 per cent on all crude oil, gas and liquified gas products.
The state issued the notice to nine companies: Petronas Carigali Sdn Bhd, Petronas Floating LNG 1 (L) Limited, Sabah Shell Petroleum Company Limited, Shell Energy Asia Limited, Hibiscus Petroleum Berhad, Respol Oil & Gas Malaysia Limited, PTTEP Sabah Oil Limited, PT Pertamina Malaysia Eksplorasi Produksi and ConocoPhilips Sabah Limited.
Sabah and Sarawak had a few years ago moved to impose the state sales tax after the federal government’s reluctance to increase the oil royalty.
Sarawak began to impose the 5 per cent sales tax on its petroleum products in January 2019 under the state’s Sales Tax Ordinance 1998.
Sabah has had the sales tax in the offing but Shafie delayed it after discussions with former prime minister Tun Dr Mahathir Mohamad when they were negotiating a higher oil royalty payment of 20 per cent as stated in the Pakatan Harapan manifesto.
Since the Perikatan Nasional government took over Putrajaya in March, Sabah has become an Opposition state.
Source: https://www.malaymail.com/news/malaysia/2020/04/21/cm-petroleum-sales-tax-expected-to-yield-rm50m-monthly-revenue-for-sabah/1858761