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Wednesday, November 20, 2013

`GST will cut Petronas payout to govt'

Publication: NST
Date of publication: Nov 20, 2013
Section heading: Business Times
Page number: 001
Byline / Author: By Cheryl Yvonne Achu

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) will contribute less, in percentage terms, to the government's coffers after the goods and services tax (GST) is implemented.

Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar, however, said the lower contribution will not reflect the value of dividend and tax paid to the government.

Petronas is the largest taxpayer and source of revenue, accounting for at least 30 per cent of the government's revenue.

Wahid said the percentage of revenue contribution from Petronas has been declining and the government has to broaden its other sources of revenue.

"With revenue from GST, the proportion of Petronas' revenue will come down as a per-centage of total revenue. That is our long-term objective," he said after delivering a keynote address at the 18th Malaysian Capital Market Summit, here, yesterday.

Wahid said in 2011, the petroleum sector contributed 35 per cent to the country's revenue before easing to 33 per cent last year, due to higher contribution from other sectors.

"When GST is implemented in 2015, the government's dependence on the petroleum sector is expected to decline," he said, adding that the government has not set any percentage reduction yet.

This year, Malaysia's revenue is expected to hit RM220 billion, before rising to RM224 billion next year.

Wahid also said it is normal for a government to receive a big chunk of its revenue from petroleum resources if it has a strong oil industry.

Petronas' dividend payout ratio to the government ranges between 30 and 50 per cent. The rate is not too high, he said.

Even at 50 per cent, Petronas is still able to invest in new growth areas and give substantial returns to the government, Wahid said.

"Now, we will increase the source and quantum of revenue by implementing GST," he added.

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