Sarawak’s push for RM11 billion in revenue next year hinges on an aggressive bet: that global commodity prices hold, that oil production stays steady, and that a new tax system delivers what it promises. The state’s 2023 budget, announced December 4 by Premier Tan Sri Abang Johari Openg, lays out the numbers. But the real story is what happens if those numbers don’t hit.
Nearly half the projected revenue — RM5.25 billion — comes from taxes. The state sales tax alone is expected to bring in RM4.2 billion. That is a massive sum for a single levy. It works only if the companies drilling for crude oil, pumping liquefied natural gas, and harvesting palm oil keep paying. Any dip in global energy prices could crack that foundation. Coal is penciled in for just RM22 million. Tires for RM3 million. Those are small pieces. The big ones — crude, LNG, petroleum products at RM3.2 billion — carry the load.
Non-tax revenue sits at RM5.5 billion. The largest chunk, RM2.34 billion, is cash compensation from the federal government in lieu of oil and gas. That is not a market figure. It is a negotiated payment. If federal-state relations sour, that money could stall. Dividends from state-owned enterprises add RM1.86 billion. Interest income brings RM650 million. Land premium adds RM400 million. These are steady, but not guaranteed. A slowdown in property or a bad year for state-linked firms would ripple through the budget.
Then there is the spending side. Total regular expenditure is around RM10.8 billion. Development programs get RM7.51 billion. That leaves a surplus of RM238 million — thin. A single shortfall in revenue wipes it out. The state is not building a cushion. It is spending nearly every ringgit it expects to take in.
The consequences touch real things. That RM7.51 billion for development means roads, schools, water systems, power lines. If revenue falls short, those projects get scaled back or delayed. The state is betting on growth to justify the spending. Growth needs infrastructure. Infrastructure needs the revenue. It is a loop that works only if every link holds.
Raw water royalty is set at RM550 million. Forest royalty, wood premium, and tariffs at RM287 million. Mining royalties and land leases at RM21 million. These are smaller streams, but they depend on resources being extracted and sold. Environmental constraints or legal challenges could pinch them. The state is also expecting RM265 million from federal funds and reimbursements. Again, not fully within Sarawak’s control.
Cash compensation in place of import and excise duty on petroleum goods — RM120 million — is another federal payment. Licenses, service fees, permits, and leases add RM129 million. Every source matters when the surplus is only RM238 million.
The lottery projection of RM60 million is a footnote. Aluminum products appear in the original report as RM60 billion, likely a typo. Coal at RM22 million and tires at RM3 million are rounding errors in a RM11 billion plan. The weight sits on crude, LNG, palm oil, and federal transfers.
What to watch next: global crude prices through 2023. Palm oil prices. Federal budget negotiations in Putrajaya. And whether the state sales tax collection machinery can actually pull in RM4.2 billion. Sarawak has set a record target. Meeting it will take more than a budget speech.
