Petronas yet to pay sales tax - Sarawak state assembly speaker

Petroliam Nasional Berhad (Petronas) has yet to make any sales tax payments on petroleum products due to the Sarawak state government and instead filed an appeal over the matter at the Court of Appeal.

This was confirmed by Sarawak consultative committee on Malaysia Agreement 1963 (MA63) chairperson Mohd Asfia Awang Nassar at a press conference held after the committee’s meeting today.

Asfia, who is also Sarawak state legislative assembly speaker said the Sarawak state government would continue its civil case against Petronas if no decision was reached through negotiations with the company.

The High Court on March 13 ruled that according to the Federal Constitution, Sabah and Sarawak had the right to impose sales tax on their petroleum products.

When making the ruling, justice Azhahari Kamal Ramli rejected Petronas' application to file a judicial review to declare Sarawak's sales tax invalid and void.

Sarawak imposed a five percent sales tax on petroleum products on Jan 1 last year under the state’s Sales Tax Ordinance 1998.

Asked about an earlier statement that the sales tax issue had been settled, with Petronas agreeing not to appeal the High Court's decision, Asfia said the press conference held today was to clarify the final position over the matter.

He said the joint statement made previously by the state’s Assistant Minister of Law, State-Federal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman Ghazali and Petronas’ chairman was only a press statement and not a formal agreement.

“It was a statement based on discussions back then, and today, I am making it clear that we will continue our civil case against Petronas. Our sales and service tax is non-negotiable,” he said.

He stressed that Sarawak's oil and gas was a commodity for sale, but that the rights to Sarawak's oil and gas were not for sale or negotiable.

“Our position on the petroleum sales tax is clear. We won in the High Court, the judge ruled in favour of Sarawak pursuant to Article 95 (B) (C) whereby Sarawak can impose sales tax, a power given to Sarawak by the inter-government committee in 1963,” he explained.

Asfia said the meeting today also unanimously approved the appointments of five Sarawak state assembly members in the consultation committee, namely Abdul Karim Rahman Hamzah, Grawat Gala, Idris Buang, Sebastian Ting and See Chee How, who are all lawyers.

Sarawak was seeking RM2.878 billion in petroleum sales tax for the year 2018, said Asfia, adding that the state government would not entertain any requests for cuts or reduction of the amount.

- Bernama