Sabah expects monthly RM50 million revenue from tax collection of oil and gas products

By Olivia Miwil - April 21, 2020 @ 2:25pm

Sabah is expected to collect about RM50 million per month revenue as sales tax collection from oil and gas products, said State Finance Minister Datuk Seri Mohd Shafie Apdal. – Bernama pic

KOTA KINABALU: Sabah is expected to collect about RM50 million per month revenue as sales tax collection from oil and gas products.

State Finance Minister Datuk Seri Mohd Shafie Apdal said the estimated revenue was based on last year’s oil and gas production and current oil prices.

He said the state expects to start collecting the sales tax on the commodity before or on May 28 for products sold before April.

Mohd Shafie, who is also the Chief Minister, said in his winding up speech that Sabah had on Dec 6, 2018 gazetted the Sabah Sales Tax Order (Tax Rate) 2018 to impose five per cent tax on petroleum products.

“The Sabah Finance Ministry, through a letter dated April 1,2020, has informed nine companies who are the beneficial owners of the Production Sharing Contract in the state of the tax imposition.

“The same letter had also been handed to Petroliam Nasional Berhad (Petronas) which is the owner of oil and gas blocks in Sabah,” he said.

The companies are Petronas Carigali Sdn Bhd; Petronas Floating LNG 1 (L) Limited; Sabah Shell Petroleum Company Limited; Shell Energy Asia Limited; Hibiscus Petroleum Berhad; Respol Oil & Gas Malaysia Limited; PTTEP Sabah Oil Limited; PT Pertamina Malaysia Eksplorasi Produksi; and ConocoPhilips Sabah Limited.

Mohd Shafie said in line with Section 10(1) of the Sabah Sales Tax Enactment 1998, the companies had to apply for a licence and register as taxpayers to the Finance Ministry.

Those who failed to do so can be fined up to RM50,000 or jailed not up to three years or both.

As of April 20, the Finance Ministry had received a licence application and had been contacted by seven out of nine companies for further information.

Earlier, Mohd Shafie explained that the Sabah government used a holistic approach by involving community leaders in distributing aid for people affected during the movement control order.

He was responding to Datuk Nizam Titingan (Apas-Bersatu) who suggested the state follow the federal government and Sarawak in using the Inland Revenue Board (IRB) system as there have been reports of eligible people not receiving assistance from both the state and federal governments.

Mohd Shafie said besides using the existing database such as E-Kasih and IRB system, the state government has also taken into account those who live in the interior, not registered with the IRB and those without bank accounts who need to be reached manually.