KUCHING: The Economic Affairs Ministry will be more proactive in discussing with the Sarawak government on its proposal to impose five per cent sales tax on petroleum products starting next year.
Its minister Datuk Seri Mohamed Azmin Ali said the federal government respects Sarawak’s proposal but it has to be further discussed as it will impact Petronas.
“We respect the proposal that has been tabled and I adopt a proactive attitude to discuss further on this proposal with the Sarawak government.
“Of course, there are some concerns expressed by Petronas but this matter will be discussed further with the state government,” he said during a press conference after paying a courtesy call on Chief Minister Datuk Patinggi Abang Johari Tun Openg at his office in the State Legislative Assembly complex here yesterday.
Mohamed Azmin was asked to comment on Abang Johari’s announcement during his State Budget 2019 speech that Sarawak will impose a five per cent sales tax on petroleum products effective Jan 1 next year as part of efforts to support its development agenda.
Abang Johari said the five per cent sales tax will be levied on crude oil, natural gas, liquefied natural gas, chemical-based fertilisers and gas-to-liquid products.
According to Mohamed Azmin, any increase in cost through imposition of additional tax will cause these products to be no longer attractive because they are more expensive than the products that are produced by other oil producing states.
“And if this happens, it may affect the production of the products in Sarawak,” he added.
Meanwhile, when asked if the royalty issue was discussed during his meeting with Abang Johari, he said: “Well, we did discuss and I got with me some senior officers from Petronas.
“Of course, there are issues of legacy wealth which was raised in Parliament by Sibuti MP. We explained to the chief minister and Petronas will provide some additional information on this matter so that we can further discuss (the issue).”
Meanwhile, Mohamed Azmin was reluctant to comment on the controversy following Deputy Prime Minister and PKR president Datuk Seri Dr Wan Azizah Wan Ismail’s decision to visit Julau prior to the PKR election in Sarawak.
“I have no comment for that because I was in Tokyo accompanying Prime Minister Tun Dr Mahathir Mohamad during his visit to Japan and I just came back at 3.30am today (yesterday) and straight away to Kuching.
“But PKR always holds on to the principle that we cannot abuse our power and position, not to mention in a political party campaign. I think the same stand must be translated into action by all parties.
“I don’t have detailed information on the purpose of the visit and I think I will have to get more information.”
PKR central committee member Latheefa Koya had questioned Dr Wan Azizah’s decision to visit Julau prior to the PKR election, as the Julau MP, Larry Sng, was clearly in the camp of Rafizi Ramli who is challenging incumbent Azmin for the deputy president’s post.