5 pct SST for Sarawak’s petroleum ‘not enough’, says Abdul Karim

Image by C Morrison from Pixabay

By Lian Cheng, Karen Bong and Ling Hui

KUCHING, April 16: The five per cent State Sales Tax (SST) on petroleum and petroleum products paid to Sarawak is “not enough” as Sarawak needs to look into its deserving 20 per cent oil and gas royalty.

This is the view of Parti Pesaka Bumiputera Bersatu (PBB) Vice President Datuk Abdul Karim Rahman Hamzah who believed that the return of gas distribution rights and two islands by the federal government to Sarawak and Sabah respectively has still fallen short of the original rights of the Bornean States as safeguarded by the Malaysia Agreement 1963 (MA63).

“But that is not enough, there are many more that we are still looking into, which has been diminishing through the years, which we are asking back.

“Among them are the development funds, among them are the royalty fees. The five per cent royalty definitely is not enough. The one that we have got is the SST; the royalty, we need to look into,” Abdul Karim told DayakDaily when asked to comment on the recent recognition of Sarawak’s gas distribution rights by the federal government.


On the percentage of royalty that Sarawak should be pursuing with the federal government, Abdul Karim said it should be 20 per cent, a figure first mooted by the late former Chief Minister Pehin Sri Adenan Satem.

“Initially, we asked for 20 per cent of the royalty. That is the figure we are looking at, I believe even until now,” said Karim who is also Tourism, Arts and Culture as well as Youth and Sports Minister.

He stressed that Sarawak is not asking for royalty for oil and gas extracted in Terengganu or Sabah. What Sarawak is requesting is the royalty for oil and gas that is extracted from Sarawak’s very own territory.

“(For) what is extracted from us, definitely, five per cent is too small. They (Petronas) can come out with all their creative accounting to say that it (the increase of oil and gas royalty payable to Sarawak) is not going to benefit Petronas.

“They said it before (when Sarawak was requesting all companies to pay SST) but then suddenly, the five per cent SST is able to be paid. It does not make Petronas bankrupt. So the way I see it is, it is all accounting,” said Abdul Karim in the exclusive interview.

To him, a request of 20 per cent is not an outrageous figure as apart from the fact that it was a figure first set by Adenan, it is also a figure supported by the opposition including Democratic Action Party (DAP) and the bigger opposition coalition of Pakatan Harapan (PH) as well as the general public of Sarawak.

He recalled a session of Sarawak Legislative Assembly sitting where DAP Sarawak chief Chong Chieng Jen promised that PH would back 20 per cent oil and gas royalty should PH take over Putrajaya before driving home the point that such a fight for Sarawak was also recorded in black and white in the PH election manifesto.

“The five per cent is the Sales Tax, we have not even look into the (oil and gas) royalty. There are two big different areas. Royalty is different, royalty are ours. SST is business. It is a tax. SST can fluctuate, but royalty, we should ask for more,” said Abdul Karim. — DayakDaily