Sabah too has imposed 5% petroleum sales tax since March

KOTA KINABALU,7  April 2020:

The Sabah government has implemented a 5% sales tax on all petroleum products in the state with effect from March, said Chief Minister Datuk Seri Mohd Shafie Apdal.

He said the implementation of the tax was discussed with the federal government under then leadership of Tun Dr Mahathir Mohamad.

“We’ve been imposing the tax since last month. When I spoke to Dr Mahathir again, he asked about this, and in addition, I told him that we are claiming Sabah’s right to claim 20% of the proceeds from our land and he asked to wait a while.

“Naturally, with the Covid-19 situation we are facing, we need more funds, of course Petronas is impacted too. When I talk to its companies they accepted it as long as they were told early, it requires careful planning because we do not carry it out and then retract.”

Last month, the Kuching High Court ruled that Sabah and Sarawak had the right under the Federal Constitution to impose sales tax on petroleum products.

The court had at that time rejected Petronas’s application to file a judicial review to declare Sarawak’s sales tax was invalid and void.

Meanwhile, commenting on the appeal of plantation sector operators on the east coast – asking that they be allowed to operate – Mohd Shafie said he was aware of the complaints received but the people’s health was more important.

“We have to go into micro-detail, but in the case of Covid-19 we can’t justify it because I don’t want to endanger people, I know people complain about earning money. I am also an economist, I know, I know the economic situation, all of the workers and employers are facing difficulties.

“But we must also tackle this problem of Covid-19 which we are currently facing, but I need to fine-turn where there are factories (involved), tomorrow there will be a Cabinet meeting I will see.. I do not want to talk now.”

– Bernama