Will Sarawakians pay more for petroleum products due to new sales tax?

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Sarawakians Likely to Face Higher Petroleum Product Costs Due to New Sales Tax

Sarawakians are expected to bear increased costs for petroleum products following the state government's implementation of a 5 per cent sales tax on various oil and gas-related items, effective January 1, 2019. This tax, announced on November 5, is projected to impact not only direct consumers but also industry participants and sectors such as agriculture and transportation. The ultimate burden of this tax is anticipated to be passed on to the end-users.
Imposition of a 5 Per Cent Sales Tax

The Sarawak state government has introduced a new sales tax, set at 5 per cent, which will apply to a range of petroleum-based products. These include crude oil, natural gas, liquefied natural gas, and products derived from gas-to-liquid processes, as well as chemical-based fertilisers. This fiscal measure was formally announced during the tabling of the state budget on November 5.
Anticipated Impact on Consumers and Industries

The introduction of the sales tax is predicted to have a ripple effect across various segments of the Sarawak economy. Beyond individual consumers, the tax is expected to affect businesses operating within the petroleum industry and those reliant on its products. The agriculture and transport sectors, in particular, are identified as areas likely to experience the impact of these increased costs.
Additional Revenue for the State Budget

This new sales tax is a significant component of the 2019 state budget, which has been described as the largest in Sarawak's history. The imposition of the tax on petroleum products is projected to generate an additional RM3.897 billion in revenue for the state government. The overall 2019 budget, focused on development and rural initiatives, totals RM11.914 billion.
Concerns Regarding Economic Effects

Questions have been raised about the potential economic consequences of this tax, with concerns that it could lead to higher prices for consumers, similar to how certain goods might be priced higher in Sarawak compared to West Malaysia due to state-level levies. A call has been made for a thorough study to assess the impact of this tax on Sarawak's industries before its full implementation.

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Will Sarawakians pay more for petroleum products due to new sales tax?

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