Sarawak wants to collect more than RM11 billion in 2023, the most in its history. Premier Tan Sri Abang Johari Openg gave the target while presenting the state’s 2023 budget to the state assembly in Kuching.
About 48 percent of projected tax revenue, or RM5.25 billion, comes from taxes. The state sales tax brings in RM4.2 billion of that. Crude oil, liquefied natural gas and petroleum products account for RM3.2 billion of the sales tax, crude palm oil and palm kernel oil for RM850 million, lottery and aluminium products for RM60 million each, coal for RM22 million and tyres for RM3 million.
The raw water royalty should add RM550 million. Forest royalty, timber premium and tariffs are projected at RM287 million, and mining royalties, land rents and other items at RM21 million.
Non-tax income
Johari put non-tax revenue at about RM5.5 billion. The largest pieces are RM2.34 billion in cash compensation in lieu of oil and gas and RM1.86 billion in dividends. Interest income should reach RM650 million and land premiums RM400 million. Licences, service fees, permits and rentals add RM129 million, and compensation in lieu of import and excise duties on petroleum products adds RM120 million. Federal grants and reimbursements are expected at RM265 million.
Spending
Ordinary expenditure for 2023 is projected at about RM10.8 billion, which leaves a surplus of RM238 million. Development programmes get RM7.51 billion. Of that, RM4.54 billion, or 60 percent, is for rural areas. The state economy is projected to grow between 5 and 6 percent.
The water supply grid for stressed areas gets RM900 million in 2023. Projects include a 100-million-litre mid-level reservoir and a nine-million-litre upper-level reservoir at the Matang water treatment plant in Kuching.
Revenue for the current year has beaten the original estimate. Johari revised the 2022 figure up to about RM10.2 billion from RM10 billion, citing favourable oil, gas and palm oil prices. By October 31, the state had collected nearly RM9.7 billion, or 95 percent of the projection. The 2022 ordinary expenditure estimate rose by RM60 million, or 2.5 percent, to RM10.7 billion from RM10.65 billion.
Federal grants and the wealth fund
Sarawak has sent the federal government its formula for reviewing the state’s special grants. “I implore the federal government to give due and serious consideration to our proposal that is fair and equitable to the state,” Johari said. He also said the federal cabinet had agreed to put Sarawak and Sabah representatives on the board of the Inland Revenue Board, and he urged the new federal government to table the amendment to the IRB of Malaysia Act 1995 quickly.
The state will also set up a sovereign wealth fund with an initial RM8 billion from the consolidated fund. Annual appropriations follow: RM300 million in years two to five, RM550 million in years six to 10 and RM650 million in years 11 and 12. The state assembly passed the fund’s board bill the previous week.
