Why The Introduction Of The Petroleum Sales Tax In Sarawak May Not Appeal To Everyone

Ummm, the answer’s in the title?

Dateline 2019-09-30, The Malaysian Reserve:

IN NOVEMBER last year, the Sarawak state government announced a proposed sales tax on petroleum products to increase State revenue.

The five per cent sales tax on petroleum products include amongst others, crude oil, natural gas, LNG, chemical based fertilisers and gas-to-liquid products, and is expected to generate an estimated revenue of RM3.897 billion and diversify the State’s revenue base. Analysts say the amount, which has been factored in the State’s 2019 Budget, could be much higher.

Merely two months after, the State announced that the five percent sales tax will only be imposed on sale and delivery of petroleum products outside the State.

While introduction of a sales tax on petroleum products may result in improving the coffers of the State, in the long run the increased production cost may make the petroleum industry less attractive to investors.

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