Sarawak hopes Petronas pays state sales tax following High Court ruling

Sarawak assistant law minister Datuk Sharifah Hasidah Syeed Aman Ghazali says she hopes Petronas will pay the sales tax. —Picture by Sulok Tawie
Sarawak assistant law minister Datuk Sharifah Hasidah Syeed Aman Ghazali says she hopes Petronas will pay the sales tax. —Picture by Sulok Tawie

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KUCHING, March 13 — Petroliam Nasional Bhd (Petronas) should not appeal against the decision of the High Court that the state has every right to impose sales tax on the export of petroleum products, Datuk Sharifiah Hasidah Syeed Aman Ghazali said today.

The Sarawak assistant law minister said the national oil and gas giant is a taxable entity, and what the state government has done is within the ambit of the Federal Constitution.

“We do hope that Petronas will accept this decision and pay up the state sales tax because our state legislative assembly has every right, under the Federal Constitution, to impose the sales tax as a result of the Malaysia Agreement 1963, and the recommendations under the Inter-Government Committee Report.

“Nobody can take our right under MA63 for us to impose the tax and also to annex laws as agreed upon and recommended under the IGC Report,” she said.

She stressed that state senior legal counsel Datuk Seri Fong Joo Chong hoped that Petronas will work together with the state-owned Petroleum Sarawak Berhad (Petros) and the state government to help the oil and gas industry, which is currently coming under very challenging times, because of low global prices and demand.

Separately, Sarawak DAP chairman Chong Chieng Jen congratulated the state government on its victory in the judicial review application taken up by Petronas challenging the rights of Sarawak to impose sales tax on crude oil extracted within Sarawak waters.  

“It is surely a decision welcomed by all Sarawakians,” he said.

Chong said it is incumbent upon Petronas to make the payment without any delay.

“Petronas, which is under the Prime Minister Office’s jurisdiction, should not delay the matter with appeal to the Court of Appeal on the High Court’s decision,” he said.

The former Deputy Minister of Domestic Trade and Consumer Affairs said Sarawak DAP has always maintained its stand that what rightfully belongs to Sarawak should be accorded as such.

Earlier today, High Court Judge Azhahari Kamal Ramli ruled that the Comptroller of the State Sales Tax had acted within the purview of the State Sales Tax Ordinance by imposing the sales tax on Petronas.

He also ruled that notices of assessment were issued legally by the comptroller to the Petronas.

“The first respondent (comptroller) had also acted reasonably in issuing the notices and the statements because the applicant (Petronas) had taken the stand that it is not a taxable person and had failed to submit the return as requested by the first respondent,” the judge said when dismissing a judicial review application by Petronas against the decision of the comptroller to compel Petronas to pay the 5 per cent sales on the export of petroleum products.



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