Sarawak’s SST win paves way for influx of billions in annual revenue

Shankar Ram Asnani

By Ling Hui

KUCHING, Aug 6: Sarawak’s win against Petronas over the right to impose of State Sales Tax (SST) on Sarawak’s oil and gas today has paved the way for the state government to earn billions in annual revenue in days to come.

Senior lawyer Shankar Ram Asnani said Sarawak not only has legal rights over the SST from Petroliam Nasional Berhad (Petronas) but also all the payments made by other oil and gas (O&G) companies operating in Sarawak.

“As I understand it, the suit against Petronas was based on some half-yearly SST payments due and owed by Petronas in 2019, which they refused to settle and came to some RM2 billion eventually with penalty charges (with more charges to be imposed).

“By now, the Sarawak government can also charge SST for the year end of 2019 and first half of 2020 amounting to an additional RM2 billion or so,” he asserted in a statement today.


Sarawak imposed a five per cent tax on all petroleum products in the state in January 2019 on their share of oil revenue under the State Sales Ordinance 1998.

All petroleum companies operating in Sarawak paid up except Petroliam Nasional Berhad (Petronas), prompting Sarawak to file a RM1.3 billion civil suit.

Petronas then filed a judicial review application against the State Comptroller challenging Sarawak’s right to impose the said tax on its petroleum related products.

On Monday (Aug 3), Petronas decided not to fight the SST and withdrew its appeal at the Court of Appeal in Putrajaya against the Kuching High Court ruling that Sarawak is entitled to collect sales tax on petroleum products.

Today, a Consent Order which was signed all parties was submitted to the Kuching High Court to withdraw all actions, thus amicably settling the issue. Petronas has agreed to pay SST and has identified seven of its subsidiaries to make the payments to the Sarawak government.

Shankar opined that such a historic achievement will certainly benefit all Sarawakians and the future will be bright if properly managed.

He reiterated that the state must now forge and pursue its autonomy in education and healthcare.

“The education of our young cannot be taken lightly because we need to see Sarawak grow strong and produce bright young people for the future of Sarawak.

“Our Chief Minister (Datuk Patinggi Abang Johari Tun Openg) has paved the way by creating a new ministry, the State Education Ministry.

“Healthcare is also another big matter we must pursue. I trust that the Right Honourable CM Abang Johari together with the Honourable Deputy Chief Minister (Datuk Amar Douglas Uggah Embas) and (Local Government and Housing Minister) Datuk Seri Dr Sim Kui Hian, will lead Sarawak in the right direction as he has done well so far,” he asserted. — DayakDaily