Petronas commits to RM1.3b in sales tax arrears to Sarawak

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, Aug 6 — Petroliam Nasional Berhad (Petronas) has given a written confirmation that its seven subsidiaries will pay a total of RM1.3 billion in state sales tax (SST) including penalties for late payment and interest for the period of January-June 2019, an assistant minister said today.

Assistant Minister of Law, State-Federal Relations and Project Monitoring Datuk Sharifah Hasidah Sayeed Aman Ghazali said the subsidiaries, including Petronas Carigali Sdn Bhd, are directly involved in the sale of petroleum products in Sarawak.

“These subsidiaries, identified by Petronas, are in the process of being registered with the Comptroller of SST as taxable persons who would be liable for payment of SST to the state government,” she said in a statement.

She added the registration process would be completed by August 15.

“The Comptroller is now making an assessment of the amount of SST which each of the subsidiaries has to pay for the year 2019 based upon records of volume of petroleum products actually sold by them and declaration of the sale value thereof provided by these subsidiaries.

“Such assessment would be made by the Comptroller strictly in accordance with the provisions of the State Sales Tax Ordinance, 1998 and the State Sales Tax Regulations 1998,” Sharifah Hasidah said, stressing that there would be no discount or waiver to be granted.

She added Petronas has given written assurance that these subsidiaries will pay the SST when so assessed.

She said Petronas' withdrawal of its appeal against the High Court’s decision affirms the state's constitutional authority to impose SST on petroleum products.

Sharifah Hasidah also said the termination of the legal process to recover SST from Petronas, the issue of the state's rights to levy SST on petroleum products is finally settled.

“The state government will now focus on strengthening its Petroleum Sarawak Berhad (Petros) and Sarawakians and Sarawakian companies' participation in the oil and gas sector in collaboration with Petronas,” she added.

The state government and the Comptroller of State Sales Tax have withdrawn the civil suit filed by them against Petronas to recover State Sales Tax (SST) for the period January to June 2019 amounting to almost RM1.3 billion including penalties for late payment and interest.

Petronas has also withdrawn its counter-claim against the state government and the Comptroller for wrongfully imposing SST on Petronas for sale of petroleum products.

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