Shafie tables Sabah Budget 2019, first ever presented by Warisan-led govt


Shafie holds the 2019 State Budget speech which he tabled at the State Legislative Assembly sitting yesterday. Seen with him is Deputy Chief Minister Datuk Seri Madius Tangau.

KOTA KINABALU: The Warisan-led Sabah government yesterday presented its first budget – a surplus budget of RM4.16 billion for 2019.

This will be the fifth consecutive year that Sabah has a surplus budget.

The budget last year was RM4.104 billion.

The expected revenue for next year is RM4.27 billion.

In tabling the 2019 budget themed ‘Driving Growth for the People’ at the August House yesterday, Chief Minister Datuk Seri Panglima Shafie Apdal said the surplus for 2019 would involve an increase of RM40.43 million – or equivalent to 62.31 per cent from the 2018 Budget.

“This is the highest surplus in the last five years,” he said.

Shafie added that the estimated revenue for 2019 had been classified into three main categories — tax revenue, non-tax revenue and non-revenue receipts.

He said of the RM4,265 million revenue collection, RM1,125.6 million (26.4 per cent) would be tax revenue; RM2,735.9 million (64.1 per cent) in non-tax revenue; and RM403.5 million (9.5 per cent) in non-revenue receipts.

Shafie also said petroleum royalty is expected to remain the highest contributor to 2019 total revenue estimates, which would account for 37.5 per cent with a projected collection of RM1,600 million.

“This is based on the payments received by the Sabah government in 2018 amounting to RM1,606.6 million and is the highest amount of petroleum royalty ever received in the history of Sabah.

This amount also exceeds year 2018 estimates of RM1,318 million subsequent to the increase in price and production of petroleum,” he added.

The second highest contributor to Sabah revenue is the state sales tax on crude palm oil (CPO), which leads in the tax revenue category.

“It is expected that the price of CPO could reach RM2,400 per metric tonne with production of more than five million tonnes in 2019.Therefore, the Sabah government has projected a collection RM900 million from this source.”

Shafie said to achieve the aim, the Sabah government would not be relying on raw sources but rather on downstream efforts.

“If we could enhance the capacity in going downstream, we would be able to realise this,” he said.

Shafie also said the revenue estimates for next year on state sales tax on lottery tickets are expected to remain the same as the 2018 estimates of RM60 million.

The chief minisyer also stated later in a press conference that the state government would commence the collection of sales tax on fishery commodities brought out from Sabah at a rate of five per cent – beginning next year. The revenue collection from this sales tax is estimated to be at RM20 million.

In tabling the budget, Shafie explained that the State Sales Tax (Tax Rate) Order 2014, which allows the Sabah government to impose tax on fishery commodities brought out from Sabah, had been gazetted before but the tax collection had never started.

The commencement of the collection of sales tax is due to the high number of complaints on insufficient high-quality fish supply for local consumption, he said.

“This tax should not burden the people because it is not imposed on local consumption.

It should be able to promote Sabah as fresh and quality seafood haven at a reasonable price in this region,” he said.

Meanwhile, the non-revenue receipts category consists of federal government receipts and contributions – estimated at RM403.2 million, or 9.4 per cent of the total state revenue estimates in 2019, said Shafie.

Examples of receipts in the category are ‘Capitation Grant’ and ‘Grant to Fund Operating Expenses for Departments under Concurrent List’, he said.

Shafie said contributions under the category were only part of the financial funding provided by the federal government to Sabah.

He also said the Sabah Ports and Harbour Department is expected to contribute RM45.4 million to the state revenue; whilst the Forestry Department is expected to contribute RM149.5 million, or 3.5 per cent of the total state revenue for the year 2019.

He said the contribution from the Forestry Department would be slightly lower than last year’s estimates and that the attributing factor to the decline was the ban on timber exports by the Sabah government, starting from May 23 this year.

Returns on agro-forestry royalty are also expected to decline as a result of lower prices on oil palm and rubber, he said.

At the same time, Shafie also called upon all revenue collectors, namely Sabah Land and Survey Department and Sabah Water Department, to increase their efforts in revenue collection including measures to reduce the arrears.

He stated that the Sabah Water Department had managed to collect RM66.8 million in revenue between August and the end of October this year, following the revamp and restructure of the department.

He added that the department is expected to collect revenue of RM330.2 million next year, which would contribute 7.7 per cent to the total estimated revenue of the year.

“The increase in revenue collection will facilitate the government to provide a higher allocation to fund programmes to improve quality, coverage and treated water supply to the rural areas, which is still inadequate,” he said.

Meanwhile, the estimated revenue estimates for Sabah Land and Survey Department next year is RM285 million.

The Wildlife Department and the Veterinary Services Department are expected to collect RM20.8 million and RM4 million, respectively, in 2019.

The interest and investment returns are expected to decline, with an estimate of RM369.5 million, for 2019 versus RM453 million in 2018.

He said the Interest and Investment Returns are expected to decline with an estimate of RM369.5 million for 2019, versus RM453 million in 2018.

“This decline is due to lower dividends received from statutory bodies and government agencies as well as lower tax refunds from Inland Revenue Board.

Contribution from this category represents 8.6 per cent of the total state revenue estimates in year 2019,” said Shafie.

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