Shafie speaks to reporters during a press conference meant to address the first 100 days of the new Sabah government. — Bernama photo
KOTA KINABALU: Sabah is willing to ‘share’ its oil profits with the other states, but will remain firm in demanding for the 20 per cent oil royalty, based on gross profit.
Chief Minister Datuk Seri Shafie Apdal pointed out that the recent
20 per cent oil royalty announcement by the federal government was not in tandem with Sabah’s initial request as the royalty to be given would be based on ‘net profit’ instead of ‘gross profit’.
“I believe that this has to be realised. We have to deal with it. I have indicated this to Petronas president that the Sabah government and state cabinet have affirmed the stand that the 20 per cent (royalty) should be based on gross profit,” Shafie told reporters at a press conference here on Tuesday.
“We do not mind sharing it with other states, but what is important for us is that we want the 20 per cent to be based on gross profit,” said Shafie, who is also the Sabah Finance Minister.
He said he would be meeting with Prime Minister Tun Mahathir Mohamad and the Minister in charge of the Economics Department.
Shafie reckoned that Sabah deserves the 20 per cent as it is one of the biggest states in the country and that it is in need of money for development.
He also said the 20 per cent royalty is needed in order to create more job opportunities in the state so that Sabahans would no longer have to migrate to other states just to look for jobs.
Commenting on the 40 per cent net revenue owed by the federal government to Sabah (as stipulated in Malaysia Agreement 1963), Shafie said the demand for the revenue must be realised.
“This is another issue that we have included in our manifesto, where we have said that the demand for the 40 per cent should be realised.
“Of course, all this while, since 1973, we have been getting an amount in the magnitude of RM23 million per year, if I am not mistaken,” Shafie said.
He explained that numerous taxes had been collected by the federal government, citing levy tax and income tax as examples.
“But we have never complained about that. What is important for us is to ensure that we can share what has been contributed by the state government.
“We are the state – we only want to demand what has been collected from the state of Sabah,” Shafie added.
Shafie said the Sabah government is well aware of the fact that almost 50 per cent of the country’s entire oil production capacity originate from Sabah.
Previously, the federal government would collect three forms of profits – the five per cent oil royalty, the oil dividends and the oil taxes. In contrast, Sabah and Sarawak were only given five per cent oil royalty each.