OIL PACT: FORGET ABOUT REVIEW
CM: 1976 AGREEMENT HAS NO PROVISION AND ISSUE SHOULD NOT BE RAISED
The 1976 Agreement between the State and Federal Government contains no provision for a review of the existing rate of oil royalty payment to Sabah.
Chief Minister Datuk Seri Musa Aman said this when replying to Luyang Assembly Member Melanie Chia who asked during the debate on the RM2.7billion State Budget 2009 whether the State Government intended to review the existing rate of oil royalty payment.
“Barang yang lepas jangan dikenang, kalau dikenang merosak diri (Past matters should not be raised as it will only hurt),” he said in his winding up speech on the debate of the State Budget.
Instead, Musa, who is also the Finance Minister, reckoned that as far as the oil royalty issue is concerned, the people should adopt a broad-minded attitude.
He said opportunities still abound for Sabah to reap the benefits from the revenue generated over the production of crude oil commodities that are found in Sabah waters.
“Those benefits are channelled through the Ninth Malaysia Plan and the various proposed high projects such as the petrochemcial industry and electricity power plants,” Musa said.
The Budget that was unveiled by Musa last Friday was passed by the House on the final day sitting of the State Legislative Assembly for this year yesterday.
In reasoning the State Government’s decision to come up with a deficit budget, Musa said “we are planning for the future and not tomorrow” for the State and the people.
Further more, an expansionary budget is required to ensure that the State economy would continue to grow and to prevent Sabah from being hit by an economic slowdown, he added.
To ensure the targeted revenue for 2009 is achieved, the Chief Minister said the Finance Ministry had taken into account the plans put in place by the other Government departments.
Musa said these included the Land and Survey, Forestry and Water Departments, which are the main contributors to the State’s coffers.
These Departments had been directed to adopt a conservative approach in coming up with forecast revenue collections.
“Besides, enforcement efforts have been further enhanced to ensure there is no loss of revenue, while certain banks were appointed as revenue collection agents and more collection counters and diversification of payment facilities such as the Internet were created to boost revenue collection,” he said.
On the issue of tax rate on palm oil raised by Sri Tanjung Assemblyman, Jimmy Wong, from the DAP, Musa pointed out that the State Government Only imposes sales tax and not on profit as provided for under the State Sales Tax Enactment 1998.
“Tax imposed on profit of sales is beyond the State Government’s jurisdiction,” he said, adding that may be, Jimmy does not fully understand the tax mechanism system of crude palm oil.
