KUCHING: The five percent sales tax on petroleum products need not burden Sarawakians.
Responding to Economic Affairs Minister Datuk Seri Azmin Ali’s concern of the possibility of costs rising due to the extra tax imposed, Sarawak Institute for Public Affairs (SIPA) Director Philip Wong said it was only natural that any increase in cost would result in a rise in prices.
Wong, however, was quick to point out that Sarawakians could still be saved from having to deal with price increase if Petronas could absorb any increase in cost.
“All that Sarawak is asking is for Petronas to tweak its business plans and strategies as any business model will surely be able to absorb the small increase in cost and still make profits, albeit maybe less than before, but still handsome profits nevertheless,” he said.
Wong, who is also an entrepreneur and author, said for Petronas to absorb any price increase or increase in cost as a result of the new tax was ‘fair exchange’ for the billions it would continue to make from Sarawak’s oil.
According to Wong, there would be zero revenue for Petronas if it does not have the oil resources from Sarawak’s producing fields, therefore for it to pay an additional five percent is certainly not tantamount to operating at a loss.
Azmin who was in Kuching on Wednesday had said Putrajaya would further discuss the sales tax with the state as it had implications on Petronas and its related activities.
He said the sales tax could affect the production of goods and services, especially related products, affecting their market competitiveness and Sarawakians having to pay more to use these products.
Wong however argued that the majority of Sarawakians are supportive of the state’s decision because Sarawak must develop sustainably to attain a developed state status by 2030.
Wong is of the view that with the expected increase in revenue from the sales tax, the state government is well poised to expand its development agenda, especially in the rural areas, as well as in providing social services.
“What is necessary is transparent accounting practices for the collection and spending of the extra revenue lest the suspicion on wastage be raised by the people.
“Malaysians are still mystified by the wealth of Petronas after 60 years and Sarawakians certainly do not want to be left in the dark about the revenues derived from the sales tax imposed come 2019,” he added.
