5 pct sales tax a master stroke, says tax consultant

SIBU: Chairman of Sarawak United People’s Party (SUPP) Dudong, Wong Ching Yong, supports the imposition of five per cent sales tax on petroleum products, describing it as the master stroke by the chief minister.

Wong, who is a chartered accountant and a tax consultant, said it seemed that, from the federal constitution, there is no ceiling on the rate of tax that could be imposed.

“If the Sarawak government can impose five per cent (tax) on petroleum products, there is every possibility that the sales tax may increase from five per cent to 10 per cent.

“The imposition of five per cent sales tax on petroleum products is a master stroke by our chief minister,” he said.

Chief Minister Datuk Patinggi Abang Johari Tun Openg announced on Monday that the Sarawak government had decided to impose a five per cent sales tax on petroleum products, starting Jan 1 next year.

The sales tax will be levied on petroleum products such as crude oil, natural gas, liquefied natural gas, chemical-based fertilizers and gas to liquid products.

Wong asked if there’s no ceiling on the rate that could be imposed, would the Sarawak government raise the sales tax in subsequent years to 10 per cent by invoking the Sales Tax Ordinance 1998.

He also said that Part V of the Federal Constitution is Additional Sources of Revenue Assigned to States of Sabah and Sarawak.

“Under it, the state could have additional 10 revenues which include the State Sales Tax, which is stated on item seven,” he said.

On the RM11.914 billion allocated for the 2019 Budget, he believed that the people would see more development in Sarawak next year.

The government allocates RM9.073 billion (76 per cent of the total budget) for development expenditure whilst the rest RM2.841 billion (24 pct) is for operating expenditure.

“I think this is good news for the people of Sarawak because compared to the federal government’s budget, I think Sarawak, particularly its rural areas, will see more development next year.

“More money is being allocated for the development of the rural areas.”

Finance Minister Lim Guan Eng announced last Friday that the total expenditure for the Malaysia Budget 2019 is RM314.6 billion.

The allocation for development expenditure is RM54.7 billion while operating expenditure is RM259.9 billion.

“Our budget (Sarawak) is a ‘development-biased and rural-focused’ budget. The people will definitely benefit from it,” he said.

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