For the people of Sarawak, the state’s ambitious revenue target of RM11 billion by 2023 could have a significant impact on their lives and communities. With a substantial portion of the anticipated tax revenue, approximately RM5.25 billion, expected to come from various sources, the state government is poised to make a meaningful difference in the lives of its residents.
According to Sarawak Premier Tan Sri Abang Johari Openg, the state sales tax is expected to generate RM4.2 billion in revenue, while taxes on crude oil, liquified natural gas (LNG), and petroleum products will contribute RM3.2 billion. The state’s revenue streams are diverse, with RM850 million expected to come from crude palm oil (CPO) and crude palm kernel oil, RM60 billion from the lottery, and RM60 billion from products made of aluminum.
Additionally, RM22 billion will come from coal, and RM3 billion will come from tires. The state is also expected to receive RM550 million from the raw water royalty and RM287 million from the forest royalty, wood premium, and tariffs. These revenue streams will contribute to the state’s overall budget, which will be allocated to various development programs and initiatives.
The state government anticipates receiving roughly RM5.5 billion in non-tax revenue, including RM2.34 billion in cash compensation in lieu of oil and gas (O&G), RM1.86 billion in dividend income, RM650 million in interest income, and RM400 million in land premium. Other sources of non-tax revenue include RM129 million from licenses, service fees, permits, leases, and RM120 million from cash compensation in place of import and excise duty on petroleum goods.
Expected federal funds and reimbursements total RM265 million, and the state will be able to produce a surplus of RM238 million in 2023.
Development-Focused Budget and Economic Growth
The state budget for 2023 will continue to be development- and rural-focused, with RM7.51 billion allocated for development programs, of which RM4.54 billion, or 60%, will be used to develop rural areas. The state’s economy is expected to rise by 5% to 6% in 2023, and the government’s efforts to stimulate growth and development are likely to have a positive impact on the lives of Sarawak’s residents.
Premier Tan Sri Abang Johari Openg noted that the state’s revenue for 2022 was increased from the initial projection of RM10 billion to approximately RM10.2 billion, with almost RM9.7 billion, or 95% of the projected revenue, received by the state as of October 31, 2022. The estimated amount for routine expenditure in 2022 was improved by RM60 million, or 2.5%, to RM10.7 billion from RM10.65 billion.
As the state government continues to work towards achieving its revenue target and implementing its development-focused budget, the people of Sarawak can expect to see significant investments in rural areas and a boost to the local economy. With the state’s economy expected to grow by 5% to 6% in 2023, the next year is likely to be an exciting time for Sarawak, with new opportunities and challenges emerging.
Looking Ahead
As the state government moves forward with its plans to achieve the revenue target of RM11 billion, it will be important to watch how the various revenue streams contribute to the overall budget. The allocation of funds to development programs and initiatives will also be crucial in determining the impact of the budget on the lives of Sarawak’s residents. With the state’s economy expected to grow and the government’s efforts to stimulate development, the next year is likely to be a significant one for Sarawak. As the state continues to work towards achieving its goals, it will be important to monitor progress and watch for any updates on the state’s revenue and budget allocation. What to watch next will be how the state government’s efforts to stimulate growth and development will impact the lives of Sarawak’s residents and the overall economy of the state.
