Sarawak legal counsel: Petronas waiting for Putrajaya nod on RM3b payment

Workers work on a signage bearing a Petronas logo in Kuala Lumpur March 12, 2017. — Picture by Yusof Mat Isa
Workers work on a signage bearing a Petronas logo in Kuala Lumpur March 12, 2017. — Picture by Yusof Mat Isa

KUCHING, Oct 9 — State legal counsel Datuk Seri Fong Joo Chung today said Petroliam Nasional Berhad (Petronas) is waiting for clearance from the federal government to pay  RM3b in revenue collected from the sales tax on the export of petroleum and petroleum products to Sarawak.

He said this was disclosed by Petronas officials met with state officials, including the controller of sales tax, director of the state planning unit, state attorney general and himself after the state government threatened to sue the oil company to claim the sum.

“They asked the state government not to sue the oil company because they are waiting for instructions from their shareholders, that is, the federal government,” Fong, a former state attorney general, told reporters here.

He was responding to comments made by Professor Shad Saleem Farugi on the State Sales Tax on petroleum products during a forum titled 'Spirit of the Malaysia Agreement 1963 in Our Constitution' yesterday.

Fong said the state government offered Petronas three options to help solve the problem related to the payment of 5 per cent sales tax imposed on the export of petroleum and petroleum products, but declined to disclose what the three options are, adding that the disclosure is up to Petronas.

He said Petronas’ argument is that the sales tax will affect the profit or dividends that they will give to the federal government.

“That is why they say they need the federal government to give the green light for them to pay the RM3 billion to Sarawak,” he said.

He said there is no reason for the federal government to disallow Petronas from making the payment.

Fong said based on the statistics published in a Malaysian financial newspaper, the federal government’s revenue for this fiscal year 2019 is about RM231 billion.

“So, if the federal government is to sacrifice RM3b for the state sales tax, that amount is less than 1.5 per cent of the RM231 billion. So it is very small in percentage terms,” he said.

He said the RM231 billion included revenue from oil and gas, property gains tax imposed on land transactions, stamp duty and taxes paid by the Sarawak companies and Sarawakians.

Fong also said that over the years, Sarawak has contributed RM660 billion to federal coffers from the oil and gas sector, excluding the profits from the export of natural gas.

He said out of the RM660 billion, only RM33 billion was given back to Sarawak.

“We don’t want to pick a fight with the federal government or Petronas.

“But we are asking for a fairer share of the oil and gas revenue derived from the production and exploration in Sarawak.

“There should be more opportunities given to Sarawak-based companies, state government and Sarawakians to actively participate in the oil and gas industry," he said.

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