Oil and gas royalties, sales tax to bring RM2.4 billion
Published on: Wednesday, May 24, 2023
By: Hayati Dzulkifli
Through this collaboration, Sabah will get revenue sharing, participation and greater dominance related to oil and gas, Juhar said. - Reuters pic
Kota Kinabalu: Although the state’s economy is still shackled by uncertainties of world economic environment, Sabah has once again succeeded in making history with its revenue collection in 2022 at RM6.960 billion.
“This is the highest revenue collection record after the significant success achieved in 2021 with revenue collection of RM5.449 billion which showed an increase of 28 per cent.
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Under the SMJ Development Plan, the State Government takes an approach to increase revenue through existing strengths and opportunities and at the same time avoid revenue leakage by practising good state governance,” said Head of State Tun Juhar Mahiruddin.
“Agreement with Petronas through the Commercial Collaboration Agreement (CCA) was signed based on the principle of ‘Greater Say, Greater Participant, Greater Revenue’.
Through this collaboration, Sabah will get revenue sharing, participation and greater dominance related to oil and gas.
“Thus, the State Government through Sabah Energy Corporation (SEC) which is a Sabah Government Linked Company (GLC) has signed a Natural Gas Supply Agreement with Petronas which makes SEC the largest domestic supplier and transporter of natural gas in the state.
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“This step will help Sabah to move forward in exploring the full potential of the natural gas industry chain in the state,” he said. Through this initiative, he said royalties and Sales and Services Tax (SST) from the oil and gas sector are expected to reach RM2.45 billion a year.
Hence, he said the State Government through SMJ Sdn. Bhd. has signed a Heads of Agreement (HoA) with Petronas Chemicals Group Berhad for the acquisition of a 25 per cent equity interest in Petronas Chemicals Fertiliser Sabah Sdn. Bhd. (PC FSSB) which will result in greater profit sharing for Sabah’s oil and gas industry.
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In an effort to empower regional development in the State, Juhar said various initiatives have been designed and implemented by the State Government through the Sabah Development Corridor Action Plan 2.0 (2021-2030).
“In 2023, the State Government through the Sabah Economic Development and Investment Authority (SEDIA) will intensify the implementation of a number of high-impact projects under 12th Malaysia Plan (12MP) and the SMJ Development Plan that will improve Sabah’s state development holistically and inclusively.
“This includes Sapangar Bay Container Port Expansion Project, Industrial Link Road Upgrade from Kota Kinabalu Industrial Park FEZ to Sapangar Bay Container Port, City Center Environmental Beautification Kota Kinabalu, Economic Development Study in the Sabah Border, Malaysia, feasibility study for the Development of Export Product Sterilization Center in Sabah Agro Industrial Precinct (SAIP), a feasibility study for the Proposed Redevelopment of Poring Hot Spring in Ranau, Sabah and a feasibility study for a proposed Redevelopment of Mesilau Tourism, Sabah,” he said.
Apart from this, Juhar said the State Government would ensure that the state’s rights in revenue claims as well as the needs and interests of the people of Sabah will always be prioritised and fought for through the Action Council for the Implementation of the Malaysia Agreement 1963 (MA63).
“In December 2022, we received good news when the Federal Government agreed to transfer the regulatory power of gas supply to the State Government.
“Accordingly, the Sabah Energy Commission (Energy Commission of Sabah/ ECoS) was established through the Sabah Gas Supply Enactment which came into force on Jan 10, this year,” he said.
Juhar said the State Government expressed its highest appreciation to the Federal Government for its support and all the efforts made to develop Sabah.
“The State Government welcomes the 2023 National Budget themed Building a ‘Malaysia Madani’ which was presented by the Prime Minister on Feb 23, this year where Sabah received a development allocation of RM6.5 billion which is 3.1 per cent higher than development allocations that have been presented in the original budget by the previous government.
“In addition, a further RM2.5 billion has been allocated to Sabah and Sarawak for the implementation of public infrastructure projects such as roads, street lights, electricity and water supply,” he said.
Apart from that, he said the State Government also welcomes the 12 efforts to develop a ‘Malaysia Madani’ in the Budget 2023 which also include various benefits for the people and Sabah.
Among them, he said are the initiative to speed up the Sabah Pan Borneo Highway and Sarawak-Sabah Link Road project along more than 1,000km, develop border towns with Kalimantan, Indonesia including Kalabakan which includes the construction of customs, immigration, security and quarantine (CIQS) facilities, increase facilities clinics, banks and courts are moving intp the interior of Sabah, overcoming the problem of poor schools and eliminating the extreme poor through the People’s Income Initiative (IPR).
“The State Government is also grateful to the Federal Government which has decided to delegate authority to the State Government to manage development projects valued at RM50 million and below.
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