By Social activist Remy Majangkim
KOTA KINABALU: In 2020, the Sabah State Government, led by Warisan, successfully implemented a 5% petroleum tax on Petronas. It was noted that the then Chief Minister, Datuk Seri Shafie Apdal, aimed for a much higher rate.
This initiative ensures that revenue from petroleum-related products contributes to Sabah’s development and progress.
Following the collapse of the Warisan Government and the establishment of the Gabungan Rakyat Sabah (GRS) led by Datuk Hajiji Nor, it is encouraging to see Petronas fulfilling its financial obligations by making the necessary payments.
In 2021, Sabah collected a significant sum of RM 1.4 billion.
That amount represents a substantial tax collection for Sabah. What is the most effective course of action for the state moving forward?
A good practice would be to allocate a large portion of these funds to established state sovereign funds for Sabah.
So, what are sovereign funds? A sovereign wealth fund is a state-owned investment fund made up of money generated by the government, often derived from a country’s surplus reserves or, in our case, from natural resources.
There are many successful examples of sovereign wealth funds (SWFs) around the world, with the Government Pension Fund of Norway being one of the most notable.
Established in 1990, its funding comes from oil and gas revenues. After 35 years of strong governance practices, its assets under management (AUM) have grown to USD 1.738 trillion to date.
Imagine if Sabah were to initiate its own sovereign wealth fund (SWF). By continuing on its current path, we could reap the rewards of such an investment in 30 years.
Achieving this goal would require a strong commitment from our leaders to envision the future and prioritise savings. The foundation of good financial management lies in wise investments and the creation of a robust financial portfolio.
