Sarawak govt issued notice to Petronas to pay sales tax, says CM

Sulok Tawie
A car passes by a Petronas petrol station in Kuala Lumpur July 31, 2019. — Reuters pic

KUCHING, Nov 4 — The Sarawak government has issued a Notice of Assessment to Petroliam Nasional Berhad (Petronas) to pay the 5 per cent sales imposed on its export of petroleum products, Chief Minister Datuk Patinggi Abang Johari Openg said today.

He said the state will allow the law to take its course if Petronas does not pay the sales tax.

“Presently, Petronas has yet to pay the state sales tax on petroleum products while other oil companies have done so.

“Under the state Sales Tax Ordinance 1998, Petronas is legally obligated to pay the state sales tax and their failure to do so would be tantamount to breach of the law,” he said when tabling the state Budget 2020 in the Sarawak State Assembly.

It is understood that Petronas owes RM1.2 billion in sales tax to Sarawak.

The chief minister also said that the state government has decided to award licences for oil and gas prospecting and production in onshore areas to Petroleum Sarawak Berhad (Petros), in exercising the state’s rights to regulate oil mining within Sarawak under our Oil Mining Ordinance 1958 (OMO 1958).

“Petros will evaluate all applicants for licences or mining leases and will be empowered by the state government to facilitate all the oil and gas prospecting and mining activities,” he said.

He added the onshore mining licences to be issued to Petros will cover the Limbang and Baram areas.

“It is the state government’s intention to manage the remaining hydrocarbon potential in the onshore areas of Sarawak,” he added, pointing out that the efforts of the state government to gain fairer and more equitable share of revenues from oil and gas produced in Sarawak will continue to be one of the main agenda of the ruling Gabungan Parti Sarawak (GPS) government.

The chief minister also called on the federal government to fulfil its promise to allocate 30 per cent of the total federal development Budget to Sarawak.

“The mere allocation of only 7.8 per cent is considered unjustified and very much skewed towards peninsula Malaysia.

“Do not forget that Sarawak has contributed significantly to the national economic growth as well as to the federal government coffer in terms of collection of taxes and revenue from oil and gas over the last 50 years,” he said.

He pointed out that the federal government had approved an allocation of RM4.4 billion out of RM56 billion for development budget to Sarawak.

“This amount represents only 7.8 per cent of the total federal development budget next year, and not 30 per cent as perceived by some people,” he said.

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