KUCHING, May 9 — The final amount of state sales tax (SST) to be paid by Petroliam Nasional Berhad (Petronas) is still under computation, Assistant Minister of Law, State-Federal Relations and Project Monitoring Datuk Sharifah Hasidah Sayeed Aman Ghazali explained today.

She said under the terms of the settlement reached yesterday, Petronas will pay in full to the Sarawak government SST due for the year 2019.

She said the amount of RM2 billion that Petronas has agreed to pay does not include the statutory late payment penalties and interest accruing on the final amount to be assessed from date of Notice of Assessment till full settlement.

“The precise amount is still under computation,” Hasidah said when responding to a statement by former state second minister of finance Datuk Sri Wong Soon Koh.

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She said the SST for year 2020 remains at 5 per cent of the sale value of the petroleum products, adding that only Notices of Assessment for the Q1 2020 have been issued to Petronas.

“There is no agreement yet for the reduction of SST for the current Year 2020,” she added.

On Wong’s claim that the anticipated O&G tax for 2019 and 2020 totalled RM6.775 billion was settled for a vastly reduced sum of RM2 billion, Hasidah said this was completely untrue and misleading.

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“The RM2 billion paid by Petronas is only SST for Year 2019 and excluded SST paid by other oil companies like Shell, Murphy Oil, Pertamina, and others operating in the state,” she said, adding that the amount of SST to be collected in 2020 had yet to be ascertained.

Hasidah said whether there would be a reduction in rate of SST in years to come would depend on the outcome of the “commercial settlement” to be reached upon the resumption of negotiations between the state government, Petroleum Sarawak Berhad (Petros) and Petronas.

“Such a commercial settlement would entail greater state participation in the upstream operation (both offshore and onshore), as well as investments in downstream business and industries, so as to enable the state to have a more equitable share of the returns from oil and gas produced within the boundaries of Sarawak,” she added.

She said the accord reached with Petronas is definitely not because the state government has been advised it has a weak case and cannot take its chances in the appellate courts, as Wong alleged.

“In fact, this settlement itself was reached after Petronas failed in its application to have proceedings to enforce payment of the SST as assessed for year 2019, deferred or suspended until the disposal of its appeal, scheduled to be on June 17, 2020,” she said.

She added that Petronas’ agreement to pay in full the SST due for the Year 2019 and withdraw its appeal must be deemed to be its unequivocal acknowledgment or admission of the state’s constitutional right to impose SST on petroleum products and its acceptance of the High Court’s judgment which declared the state has such constitutional authority to impose SST.

She also said by withdrawing the appeal, Petronas agreed to be bound by the decisions of the High Court that Sarawak’s rights is protected by the Federal Constitution, Malaysia Agreement 1963 and the Recommendations under Inter-Governmental Committee Report 1962.

“It must be made clear that by withdrawing their appeal, Petronas recognises our constitutional right and they are bound by the Laws of Sarawak and the decisions of the Court which, prior to this, Petronas refused to acknowledge our rights under the Constitution, MA 63 and IGC Report.

“The GPS state government remains firmly committed to defend the sovereign rights of Sarawak to the oil and gas resources of the state,” she said, adding that this was demonstrated by taking Petronas to court over the SST issues.

She said the state government will resolve all other issues through the ongoing negotiations with the federal government and Petronas.

“The outcome of these negotiations will ultimately bring in more investments in the oil and gas sectors to sustain the growth of related industries,” she said.

Hasidah also said the state, through Petros, will enhance its involvement in the upstream and downstream areas of the petroleum industry to secure a more equitable share in the revenues from oil and gas and petroleum products produced and manufactured in Sarawak.

Wong, in a statement last night, had asked the state government to explain why it agreed to accept RM2 billion in SST from Petronas for 2019.

He claimed under the state budget for 2019, the state was anticipated to receive RM3.897 billion and RM2.878 billion this year, both from 5 per cent sales tax on petroleum products.

Wong, who is the president of the Opposition Parti Sarawak Bersatu (PSB), said the anticipated oil and gas tax for the two years would be RM6.775 billion.

“Now we find out that the Sarawak government has to settle for a vastly reduced sum of only RM2 billion instead of RM6.775 billion,” he said.