Sarawak govt hopes Petronas will not delay paying state sales tax following High Court ruling

Wisma Bapa Malaysia

KUCHING, March 16: The Sarawak government welcomes the decision by the High Court handed down on Friday, March, 13 to dismiss the Judicial Review application by Petronas to challenge the rights of the state to impose state sales tax on petroleum products.

In a press statement issued by the Chief Minister’s Office today, the Sarawak government stated that it has always been the state’s firm stand that this right to impose the state sales tax is entrenched in the Federal Constitution read together with the Malaysia Agreement 1963 and the Inter-Governmental Committee Report (IGC Report).

“With this decision, it is hoped that there will be no further delay to the implementation of the imposition of the state sales tax caused by possible appeals and other applications by Petronas. The decision by the High Court has been based on clear points of law which Petronas should recognise and adhere to.

“This would enable the state government to proceed with its development agenda for the benefits of the people of Sarawak.”

According to earlier reports, the five per cent state sales tax imposed on Petronas and other oil and gas companies operating in Sarawak is expected to generate extra revenue of some RM3 billion annually.


Sarawak has imposed the said tax on oil and petroleum products since January 2019.

Meanwhile, state legal counsel Datuk Seri JC Fong expressed agreement with the CMO statement.

“Any appeal would be unproductive. Like other oil companies operating in Sarawak, Petronas should just pay SST (state sales tax) and move forward to boost the oil and gas industry in Sarawak which is facing challenging times due to low global oil prices. Engaging in litigation is not the most prudent way to utilise management of time and resources,” he asserted in a statement. — DayakDaily