Sarawak hopes Petronas will comply with court decision, pay up RM1.3bil

JC Fong fielding questions from the media.

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By Karen Bong

KUCHING, March 13: Sarawak government hoped that Petronas will comply with the High Court decision and pay the 5 per cent state sales tax on petroleum products, amounting to about RM1.3 billion as of July 2019.

The High Court has dismissed the judicial review application filed by Petronas and ruled that the State Legislative of Sarawak has the power to enact law and impose the sales tax on petroleum products.


State legal counsel JC Fong expressed hope this decision will be accepted by Petronas and that there would not be any appeal against the decision.

“Petros and the state government will work together to help the oil and gas industry, which is currently coming under very challenging times because of low oil prices and global demand,” he told reporters gathering at the court complex here today.

Assistant Minister of Law, State-Federal Relations and Project Monitoring, Datuk Sharifah Hasidah Sayeed Aman Ghazali, who echoed Fong’s views, urged Petronas to move forward from the decision by settling the unpaid tax.

“With the decision, it demonstrated that Petronas is a ‘taxable person’. Let’s get on with this decision as it is clear that this is our constitutional right. Why not we move forward, pay up the tax and things will be settled,” she said.

Sharifah Hasidah considered this a historic decision, that the High Court ruled the State Legislative of Sarawak has the right to enact law on its sales tax and that the State Sales Tax Ordinance is constitutional and legal within the framework of the constitution.

“The State Legislative of Sarawak has every right under the constitution to impose the sales tax as a result of the Malaysia Agreement 1963 (MA63) and the recommendations under IGC (Inter-Governmental Committee) Report,” she said.

She added that nobody can take away Sarawak’s rights under the MA63 to impose tax and enact law.

“What we did was really within the ambit of the Federal Constitution. We hope Petronas will accept this decision and not to appeal,” she continued.

With the judicial review application dismissed, she said the Sarawak government has a good chance in the civil suit, which has been fixed to be heard on April 15, to recover RM1.3 billion of unpaid sales tax and penalties from Petronas. — DayakDaily