Sarawak poised to win lawsuit against Petronas over unpaid tax

Shankar Ram Asnani

By Peter Sibon

KUCHING, Nov 26: Sarawak has a firm ground to win the case against Petronas for its refusal to pay the five percent State Sales Tax.

According to senior lawyer Shankar Ram Asnani, Sarawak has a strong case as its claim was based on Oil Mining Ordinance (OMO) 1958, which has become the basis of Sarawak forming the federation of Malaysia in 1963.

“Sarawak has a firm ground to win the case,” Shankar told DayakDaily today.

When asked if Petronas will cite the Petroleum Development Act (PDA) 1974 to challenge the legality of OMO 1958, Shankar said that could become a contagious issue during the proceedings but argued that OMO 1958 will prevail as PDA 1974 did not pass through the State Legislative Assembly, thus it was considered null and void in Sarawak.

“We are talking about the State Sales Tax, so in this case, OMO 1958 will prevail,” he added.

Shankar was commenting on Petronas’ acknowledgment of the court case against it which was filed at the Kuching High Court last week.

Sarawak de facto Law Minister Datuk Sharifah Hasidah Sayeed Aman Ghazali had said that the Sarawak government had decided to sue Petronas due to its reluctance to settle its dues while other oil companies operating in Sarawak, namely Murphy Oil and Pertamina have paid theirs.

According to a source, the amount Petronas owed Sarawak for the first six months of this year was RM1.29 billion.

Chief Minister Datuk Patinggi Abang Johari Tun Openg has revealed that Sarawak is expected to earn some RM3.8 billion from the State Sales Tax on petroleum products this year.— DayakDaily