Need to repeat it again, the problem could have been avoided had Petronas been mindful of the increasing sensitivity of MA63 in Sabah and Sarawak, admit their fault and discontinue the grave "mistakes" committed, and not acted arrogantly.
Given the fiscal constrain of the Federal Government to reduce subsidy, large expenditure for government salary and pension, and low tax collection, Petronas exacerbated the present worsening financial situation from the current global economic and trade turmoil.
Petronas was rushing to expedite Najib-era initiated "reimagined" new path to the possibility oil could either dry up or no more ESG acceptable to financiers. Its CEO raised a bleak possibility of no more Petronas in 10 years.
Latest net profit for 2024 of RM55.1 billion is a shrinkage by 32% rom 2023. It has been falling since 2021.
Over the weekend, Amir Hamzah was reported saying Government has to reduce reliance on Petronas for revenue. Rafizi said the same in mid-February following Anwar's claim of resolution to the Petros-Petronas spat but message hidden behind his announcement for a new national roadmap for oil and gas industry.
Amir Hamzah: Putrajaya to cut reliance on Petronas, eyes SST expansion for extra RM5b revenue
Sunday, 09 Mar 2025 9:53 AM MYT
PUTRAJAYA, March 9 – Putrajaya will continue reducing its reliance on local oil and gas giant Petronas for revenue, with the sales and services tax (SST) set to generate additional revenue rather than a return to the goods and services tax (GST).
Sunday Star quoted Finance Minister II Datuk Seri Amir Hamzah Azizan saying that Petronas’ contribution to government revenue had dropped to about 19 per cent to 20 per cent in 2023 from over 40 per cent previously.
“For future projections, we aim to bring this down to around 15 per cent to 16 per cent while simultaneously growing other sources of revenue,” he was quoted saying.
Amir Hamzah also said that the Anwar administration’s Madani Economy Framework emphasises economic diversification, with foreign direct investment (FDI) playing a key role in sectors such as construction, particularly data centres and new factories.
He highlighted that Malaysia recorded RM378.5 billion in total approved investments last year, with a higher rate of conversion from approvals to actual investments.
Amir Hamzah also touted the expansion of the SST scope, as announced in Budget 2025, which is projected to generate an additional RM5 billion in revenue.
He downplayed the return of GST, saying it would require up to two years of transition for industries that emerged during the SST implementation.
“The industries must be coached on how to do it, and new systems need to be installed. It is not just a matter of turning on and off again,” he reportedly said in a separate article.
Amir Hamzah said the SST has been in place for over four decades and is more familiar to local businesses.
The Finance Ministry told the Parliament last month that it will continue refining the existing SST which has been in use for over 40 years.
It said Putrajaya has collected RM476.1 million from the Low-Value Goods (LVG) tax in 2024, following its implementation on January 1 that year.
Meanwhile, the Service Tax on Digital Services, which was introduced in 2020, generated RM1.6 billion in revenue in 2024.
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Not only 16,000 jobs in Petronas will be cut, Government have no choice but to expand its tax base. The public is still coping with rising cost of living but now need to face with more taxes and upcoming withdrawal of Ron 95 subsidy.
There is only so much salary could be increased. The announced increase minimum wage is not received well by businesses as it means increasing fix cost and SMEs are still grappling with the first announced minimum wage at RM1,200.
FMM was reported last week pleading Government not to introduce any more new taxes. Their call is in sync with the public grumbling which is also grappling with real rise in the cost of living beyond the controlled item CPI figures.
Earlier, FMM were pleading to postphone 30% increase in port tariff. Certainly cost of port operation has been on the rise, needed for expansion and maintain financial viability in the wake of the Trump tariff disruption.
Isn't FMM the group that vehemently opposed Najib's GST in which Vincent Tan played a big role behind the scene to lobby government against it?
Voting public and FMM reaping what they sowed for 2018. The comfort is in June 2023, FMM plead government to bring back GST and insisted it is more transparent that SST. So lets save FMM from forever making a fool of themselves.
The economic challenges seemed insurmountable for Anwar's young team. The political fallout from a public used with low cost of living and heavy subsidy cannot be underestimated.
Reminder from a previous posting, below:
The pursuit for social and political ideals are milestones for advancing his ideological agenda, but it will redirect him from staying focus and set him aback from attaining the economic reforms milestone he set out to achieve and what matter most is the long term welfare of Malaysians.
Anwar is not blessed with a team that has the depth and range to support and feed him the passes to merely score the goals. A major socio-political upheaval awaits to the soon to be recalled fuel subsidy to add-on to the bickering over rising prices and taxes squeezing on the Malaysian purse.
By hook or by crook, he need to stop getting distracted. He has to reduce his checklist of outstanding non-economic matters and not pile up more to stay focus on the problems in hand. The ill be falling on Ismail Sabri is but a temporary relief.
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