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5 pct sales tax may cause companies to cut costs

“I can see that most of these products are at the door steps of the Tanjung Kidurong Petrochemical complexes of Malaysia LNG Sdn Bhd (MLNG), Asean Bintulu Fertiliser (ABF), Shell Middle Distillate Synthesis (SMDS) and others in Bintulu.”


By imposing a sales tax on petroleum products, companies in Bintulu will have to find the 5 percent somewhere else, said Tanjong Batu assemblyman Chiew Chiu Sing. 

  “The State Budget 2019 will be the first time that the state is expected to achieve a record high revenue of more than RM10 billion.

  “I can see that most of these products are at the door steps of the Tanjung Kidurong Petrochemical complexes of Malaysia LNG Sdn Bhd (MLNG), Asean Bintulu Fertiliser (ABF), Shell Middle Distillate Synthesis (SMDS) and others in Bintulu.

“Most of the sales of these products are on contract basis with foreign countries where prices had been fixed,” he said.

Chiew added that with the sales tax imposed on petroleum products, the companies would most probably have to cut costs in various aspects, such as labour or expenditure.

“When and if that is done, it will have a big repercussion on the already slow businesses in Bintulu.

“If they don’t cut cost and absorb it, their product costs may go up and make them less competitive.

“Eventually, this may cause them to lose their contracts to other countries.

“I therefore urge that the administration address this issue seriously before any economic damage is done,” he said.

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