Petronas to withdraw appeal and pay sales tax, says Abang Jo

The Kuching High Court ruled in March that Sarawak has the right to impose sales tax on petroleum products. (AFP pic)

KUCHING: Chief Minister Abang Johari Openg says Petronas is withdrawing its appeal against the High Court’s ruling that Sarawak has the right under the Federal Constitution to impose sales tax on petroleum products.

Petronas had appealed against the High Court’s decision before Perikatan Nasional (PN) took over the federal government in February.

However, Abang Johari said he has learnt that the PN government has directed Petronas not to appeal when the case is brought before the Court of Appeal on June 23.

“The federal government has asked Petronas to comply with the High Court’s ruling that Sarawak has the right under the Federal Constitution to impose sales tax on petroleum products and to pay the state sales tax.

“The federal government wants this issue to be settled,” he said after chairing the Parti Pesaka Bumiputera Bersatu (PBB) supreme council meeting here today.

In January last year, the Sarawak government imposed 5% sales tax on Petronas’ petroleum products under the state’s Sales Tax Ordinance 1998.

Petronas, however, refused to pay the tax, saying it was unconstitutional. This resulted in the state government taking legal action against the national oil company.

On March 13, the Kuching High Court ruled that Sabah and Sarawak had the right under the Federal Constitution to impose sales tax on petroleum products, dismissing Petronas’ bid to declare the Sarawak state sales tax null and void.

Abang Johari also said the PBB supreme council meeting today discussed the state government’s preparation for a possible snap general election.

“I have asked the (Gabungan Parti Sarawak) people’s representative to go down to the grassroots level as we have to prepare for a possible election,” he said. - FMT