Petronas did not get State Sales Tax discount, testifies former chairman in defamation case

Court. — DayakDaily.com file pic

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by News Desk

SIBU, Aug 10: The libel case brought by the State Government against Parti Sarawak Bersatu (PSB) president Dato Sri Wong Soon Koh will enter its final phase when hearing resumes on 16 August, 2021 before Sibu High Court Judicial Commissioner, Christopher Chin Soo Yin.

Wong will give evidence in his defence. His legal team is also calling Bukit Assek assemblywoman Irene Chang as a witness. The trial had already heard the testimony of seven witnesses called by the Sarawak government and two witnesses for the defence, including the former chairman of Petroliam Nasional Berhad (Petronas), Tan Sri Ahmad Nizam Salleh.


The State government is suing Wong for allegations in his press statement issued on May 10, 2020. Wong had alleged that the State government had given Petronas a ‘massive discount’ on State Sales Tax (SST) and because of the Petronas settlement, the State Budget 2019 was out by billions of ringgit.

In his evidence given via Zoom from Kuala Lumpur, Ahmad Nizam who is a defence witness, testified there was no discount.

He said the sum of RM2,956,671,407.00 paid by Petronas on Sept 17, 2020 was the full amount that Petronas had to pay for the year 2019. This sum was assessed by the Comptroller of SST based on returns, submitted by Petronas, of actual sales of crude oil, LNG and condensates during the year.

Ahmad Nizam agreed with State Legal Counsel, Dato Sri JC Fong, that any allegation of a massive discount on SST given by the State government to Petronas was unsubstantiated and baseless.

Another defence witness, Batu Lintang assemblyman See Chee How testified that when he read Wong’s allegation that the State Budget 2019 was out by billions of ringgit, due to Petronas’ settlement involving a massive discount on SST, he was alarmed and concerned.

He did not ask Wong whether the billions of ringgit meant RM2 billion, RM5 billion, RM10 billion or RM100 billion.

However, the documents received by him for the Sarawak Legislative Assembly (DUN) sitting on May 11, 2020 did not show that the State Budget 2019 was out by billions of ringgit.

See admitted that he did not complain in the DUN or at the Consultative Committee that the massive discount on SST allegedly given to Petronas caused the State Budget 2019 to be out by billions of ringgit.

See also testified that he was a member of the Consultative Committee and he attended the committee’s meeting on June 10, 2020.

He confirmed that based on the minutes of the meeting, it was unanimously agreed by members who were ADUNs from all political parties including PSB, that the joint statement issued on May 8, 2020 by the State government and Petronas was “not a formal agreement” and not binding.

According to See, the committee also agreed to establish a negotiating team to negotiate “at federal level” on SST and oil and gas issues. This team comprised five members, including See himself. However, up until See resigned from the consultative committee on July 14, 2020, the negotiating team did not hold any negotiation with Petronas or any other body at the federal level.

Asked why there was no negotiation for more than a month when he was still a member of the negotiation team, he said “with hindsight I should have written to the chairman of the team, to initiate negotiations”.

See also confirmed that Wong, who is also a member of the consultative committee, told the meeting on June 10, 2020, that the amount owed by Petronas for SST was RM2.878 billion. But in his press statement, Wong alleged that Petronas “owed about RM3.8 billion.”

On the Petroleum Development Act 1974 or PDA74, See said it was a law validly passed by Parliament. He agreed that based on what was recorded (in the DUN Hansard), Wong did inform the DUN on November 11, 2008 as follows:

“Pursuant to Section 4 of the Petroleum Development Act 1974, the State government and Petronas had entered into an Agreement on 27 March, 1975 with regard to payment of royalty to the State. The State Government is thus bound by the terms of that Agreement. Any amendment to the terms and conditions of the Agreement requires the consent of all parties.”

Meanwhile, Ahmad Nizam told the court that he was not aware of any letter from Wong as Second Finance Minister to Petronas stating that the Agreement of 27 March, 1975 relating to payment of five per cent oil royalty, was no longer binding on Sarawak government.

The final phase of the trial will be for three days from 16 August, 2021. — DayakDaily