Sarawak DCM to Petronas: Don’t question sales tax on export of petroleum products

Sulok Tawie
Sarawak Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan (left) slammed Petronas for failing to obey the state sales tax. — Picture by Sulok Tawie

KUCHING, Nov 12 — Sarawak Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan today slammed Petroliam Nasional Berhad (Petronas) for failing to obey the state sales tax, but willingly complying with Canada and Brazil laws where they have operations.

“Why is it that when it comes to their operations in Sarawak, they refuse to comply with state Sales Tax Ordinance?” he asked in his winding up speech in the Sarawak State Legislative Assembly here.

Awang Tengah said it is public knowledge that Petronas has extracted hundreds of billions of ringgits’ worth of the petro-carbon resources from Sarawak territory.

“What we received in return is a mere 5 percent in the form of royalty payment

“It cannot deny that its success is built upon the oil and gas resources from Sarawak and Sabah, especially during its formative years.

“Petronas is indebted to Sarawak and Sabah and should be willing to pay the sales tax to the Sarawak government instead of giving excuses,” he said.

He also found it strange that a Malaysian government-linked company has chosen to ignore the state law while foreign petroleum companies operating in Sarawak, such as Shell, Murphy and PT Pertamina have all complied.

He said Petronas’ refusal to comply is tantamount to challenging the rights of Sarawak as enshrined under the Federal and State Constitutions.

He told Petronas not to question the imposition of the sales tax on its export of petroleum products in Sarawak.

He said the state has begun imposing sales tax levies on crude palm oil, crude palm kernel oil and lottery tickets since 1998 after the passage of the State Sales Tax Ordinance, in exercise of the powers conferred by Article 95B(3) of the Federal Constitution.

“As such, there is nothing new on the imposition of the Sales Tax on goods identified by Sarawak Government,” he said adding that every responsible corporate citizen operating in Sarawak must comply with the state laws, including the tax laws.

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