Sarawak has set a target of earning more than RM11 billion in revenue in 2023, a record high for the state. Premier Tan Sri Abang Johari Openg announced the target on December 4, 2022, during the state assembly. About RM5.25 billion, or 48% of the projected revenue, will come from taxes.
The state sales tax is expected to contribute RM4.2 billion. The tax revenue includes RM3.2 billion from crude oil, liquefied natural gas (LNG), and petroleum products.
Another RM850 million will come from crude palm oil (CPO) and crude palm kernel oil. The lottery is projected to bring in RM60 million. Aluminum products will contribute RM60 billion, though this figure appears to be a typo in the original report.
Coal is expected to generate RM22 million, and tires will add RM3 million. Non-tax revenue is forecast at RM5.5 billion.
This includes RM2.34 billion in cash compensation in lieu of oil and gas. Dividend income will provide RM1.86 billion. Interest income is set at RM650 million, and land premium will add RM400 million.
Other sources include RM129 million from licenses, service fees, permits, and leases. Cash compensation in place of import and excise duty on petroleum goods will bring RM120 million. Federal funds and reimbursements total RM265 million.
Royalties and other income
The state is also expecting RM550 million from raw water royalty. Forest royalty, wood premium, and tariffs will contribute RM287 million. Mining royalties, land leases, and other sources will add RM21 million.
The state budget for 2023 is expansive and development-focused. Total regular expenditure is projected at around RM10.8 billion.
This leaves a surplus of RM238 million. Development programs will receive RM7.51 billion. Of that, RM4.54 billion, or 60%, will go to rural areas.
“The state budget for 2023 will continue to be development- and rural-focused,” said Premier Abang Johari Openg. He added that the state expects its economy to grow by 5% to 6% in 2023.
2022 revenue performance
Favorable oil and gas and CPO prices have boosted state revenue for 2022. The initial projection was RM10 billion. That has been revised up to approximately RM10.2 billion.
As of October 31, 2022, the state had received almost RM9.7 billion, or 95% of the projected revenue. “Favorable O&G and CPO prices have impacted the state revenue for 2022 to be increase from the initial projection of RM10bil to approximately RM10.2bil,” said Premier Abang Johari Openg.
On the expenditure side, the estimated routine spending for 2022 has been increased by RM60 million, or 2.5%, to RM10.7 billion from RM10.65 billion. The state’s push for higher revenue and a development-oriented budget reflects its ambition to reduce reliance on federal allocations and build a more self-sufficient economy. With record targets and a focus on rural development, Sarawak is positioning itself for sustained growth in the coming year.
