KOTA KINABALU, Dec 18 — The new Gabungan Rakyat Sabah state government has proposed a surplus budget of RM4.3 billion for 2021, an increase to the previous year’s RM4.14 billion.
Chief Minister Datuk Seri Hajiji Noor said the state’s revenue collection for next year is expected to increase by 7 per cent compared to this year’s estimate of RM4.19 billion.
“The state government proposes an estimated budget for the year 2021 amounting to RM4,303.26 million compared to the estimated revenue collection of RM4,481.96 million with a surplus budget amounting to RM178.70 million.
“This shows that the financial position of the state government remains stable,” he said in his speech today.
The projected revenue of RM 4.482 is higher than this year’s estimate of RM4.192 million by 7 per cent or RM289.54 million.
“The increase in revenue is due to the availability of new revenue sources from the state sales tax collection.
“The revenue composition for 2021 consists of tax revenue of RM2,220.85 million, equivalent to 50 per cent; non-tax revenue of RM1,805.22 million or 40 per cent; and non-revenue receipts of RM455.89 million or 10 per cent,” he said.
Sales tax on petroleum products is the largest contributor with an estimated revenue of RM1.25 billion or 27.9 per cent of the total budget for year 2021.
“The state government will ensure that revenue through this sales tax collection is utilised to the best of our ability for the purpose of development expenditure and the well-being of the people of Sabah,” he said.
In the non-tax collection category, petroleum royalty is expected to continue to be one of the main contributors in revenue with an estimate of RM911 million or 20 per cent.
Hajiji, who is also state finance minister, said almost all state revenue sources were affected this year and the estimated revenue is projected to decrease by 17.0 per cent or RM721.42 million to RM3,471.00 million compared to the original estimate.
“This reduction due to low production and average price of crude oil has affected the collection from this source of revenue. The actual revenue collection of petroleum royalty in 2020 is RM1.13 billion compared to the original estimate of RM1.70 billion. Revenue from the crude palm oil sales tax is projected to decrease to RM793.00 million compared to the original estimate of RM825.00 million.
“This is due to the lower productions of crude Palm Oil even though the price has been good,” he said.
Hajiji also said that Sabah would be meeting with Prime Minister Tan Sri Muhyiddin Yassin soon to negotiate with Petronas over the state’s oil and gas resources, hinting that they might come to a deal similar to that between the national oil company and Sarawak.
“The state government also appreciates the high commitment by the prime minister who has instructed the Ministry of Finance Malaysia to immediately formalise the process of negotiations pertaining to the oil and gas industry between the two parties,” he said.
He said that the federal government’s commitment was also reflective in its efforts to negotiate with the state through the formation of the Special Council of the 1963 Malaysia Agreement which was convened for the first time on December 2.
“We are confident that the various major delayed issues underlying the relationship between the state government and the federal government will be addressed wisely through deliberation,” he said.