The 5% sales tax Sarawak plans to impose on all petroleum products produced in the state from Jan 1, 2019 will have a negative impact on competitiveness and Petronas’ earnings, Economic Affairs Minister Datuk Seri Azmin Ali said.

He, however, said he respects the state government's proposal and will take a proactive approach to further discuss the matter with the state government.

He said this after paying a courtesy call on Sarawak Chief Minister Datuk Patinggi Abang Johari Tun Openg in Kuching on Wednesday.