Five others, we can sit down and talk: Abang Jo
KUCHING: Sarawak will not waver in its decision to impose a five percent sales tax on petroleum and petroleum products for the export market.
Chief Minister Datuk Patinggi Abang Johari Tun Openg said he made this point very clear at the inaugural meeting of the Special Federal Cabinet Committee to review the Malaysia Agreement 1963 (MA63) on Dec 17 last year.
He said Sarawak had set four non-negotiable issues, namely immigration autonomous power, the right to enforce state ordinances in accordance with the Federal Constitution, protection on state’s borders and sovereignty on the sea, underground and resources within the state.
“There are five issues that can be negotiated such as the need to review the special allocation for Sarawak and Sabah under Article 112D of the Federal Constitution; the right to additional revenue under Tenth Schedule of the Federal Constitution; residual power under Article 77 of the Federal Constitution; land that is no longer needed by the federal government but placed under the Federal Land Commission should be returned to Sarawak; and the exercise of power in relation to education, medical and health that is not satisfactory.
“The Technical and Working Committees will begin discussing these issues from this month while the next meeting is expected to be held in February and April 2019,” he told reporters after chairing the Sarawak MA63 Consultative Committee meeting here yesterday.
Replying to a question from the media on the non-negotiable rights, Johari said there was no reply from the federal government when Sarawak brought up the issues.
He said his administration would take that as a silent consent from Putrajaya.
On the five percent sales tax, Johari, who is PBB president, said Sarawak could actually impose a higher tax percentage, for example 10 percent but the state government had considered the current economic situation.
” Why must we sacrifice our rights? “
“The Finance Minister had cited the inappropriateness of imposing the sales tax on grounds that it could raise costs and drive away investors in the oil and gas industries from Malaysia.
“But my reply to him (Lim Guan Eng) is the right to impose tax is allowed under the constitution. If it is not competitive for the federal government it could recalibrate the tax structure as currently the federal government also imposes petroleum income tax at 38 percent,” he said.
He added that it was the right of the Sarawak government and it was being implemented under Article 95C and Schedule Ten of the Federal Constitution.
In this regard, Johari said he was proposing that the federal government reduce the petroleum income tax from 38 percent to 33 percent.
“Why must we sacrifice our rights?” he asked, saying that members of the Special Committee also agreed that it is Sarawak state’s right.
Abang Johari said discussions on petroleum issues between the Sarawak government and Petroliam Nasional Berhad (Petronas) would continue.
He said this had been agreed upon by Prime Minister Tun Dr Mahathir Mohamad on Dec 17 following a proposal by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali.
Johari said the meeting was proposed as Petronas had taken cautious measures following Sarawak’s interest to participate in downstream and upstream oil and gas activities in the state..
“Sarawak also felt that it must take into consideration the Petroleum (Income Tax) Act (PITA) imposed by the federal government,” he said.
