Economic analysts examining Sarawak’s fiscal trajectory note that the state government’s revenue target of more than RM11 billion for 2023 represents a technical benchmark, as it would surpass the revised 2022 projection of approximately RM10.2 billion. According to the state budget presented to the state assembly last week by Sarawak Premier Tan Sri Abang Johari Openg, the RM11 billion figure would constitute a record income for the state.
Revenue Composition and Sectoral Breakdown
Specialists reviewing the budget documents observe that approximately 48% of the anticipated tax revenue for 2023, or RM5.25 billion, will derive from taxation sources. The state sales tax alone is projected to contribute RM4.2 billion. Within the tax category, RM3.2 billion is expected from crude oil, liquified natural gas (LNG), and petroleum products, while RM850 billion will come from crude palm oil (CPO) and crude palm kernel oil. Additional tax revenue streams include RM60 billion from the lottery, approximately RM60 billion from products made of aluminum, RM22 billion from coal, and a final RM3 billion from tires.
Technical analysts point to the raw water royalty as a significant new revenue source, with the state about to receive RM550 million from this category. Forest royalty, wood premium, and tariffs are expected to contribute RM287 million. Mining royalties, land leases, and other sources are projected to add RM21 million.
Non-Tax Revenue and Federal Transfers
The state government anticipates receiving roughly RM5.5 billion in non-tax revenue, according to Johari. This includes 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 non-tax revenue sources include RM129 million from licenses, service fees, permits, and leases, as well as RM120 million from cash compensation in place of import and excise duty on petroleum goods. Expected federal funds and reimbursements total RM265 million.
With the predicted total regular expenditure for the upcoming year being around RM10.8 billion, the state will be able to produce a surplus of RM238 million in 2023, according to the premier. This surplus calculation is based on the RM11 billion revenue target against the RM10.8 billion expenditure projection.
Analysts note that the state budget for 2023 will continue to be development- and rural-focused. It will include RM7.51 billion for development programs, of which RM4.54 billion, or 60%, would be used to develop rural areas. The state government expects the state’s economy to rise by 5% to 6% in 2023.
Comparison with 2022 Performance
Johari stated that various factors have impacted the state revenue for 2022, increasing it from the initial projection of RM10 billion to approximately RM10.2 billion. As of October 31, 2022, almost RM9.7 billion, or 95% of the projected revenue, had been received by the state. On the expenditure side, the estimated amount for routine expenditure in 2022 was improved by RM60 million, or 2.5%, to RM10.7 billion from RM10.65 billion.
Looking forward, analysts will be watching how global commodity prices—particularly for crude oil, LNG, petroleum products, crude palm oil, and coal—affect Sarawak’s ability to meet its RM11 billion revenue target. The state’s reliance on resource-based revenues, combined with the new raw water royalty stream, will be key indicators of fiscal sustainability. The 5% to 6% economic growth projection for 2023 will also be closely monitored against actual performance, as will the execution of the RM4.54 billion allocated for rural development programs.
