‘See you in court, Petronas’

Datuk Sharifah Hasidah Sayeed Aman Ghazali

BAU, Dec 7: Petroliam Nasional Bhd (Petronas) has filed a statement of defence to challenge the suit by Sarawak government over non-payment of the state sales tax on petroleum products.

Assistant Minister in the Chief Minister’s Department (Law, State-Federal Relations and Project Monitoring), Datuk Sharifah Hasidah Sayeed Aman Ghazali, disclosed that Petronas has responded to the suit with filing an entry of appearance and a statement of defence late evening yesterday.

The statement was delivered two days before the deadline of Dec 9.

“This means that they (Petronas) are challenging us (Sarawak government) and following the statement of defence filed, this matter will be brought to court.

“The court will fix a date for the trial later,” she told a press conference after officiating at the Intellectual Discourse for Bau District held at the Bau Civic Centre today.


On Nov 21, the Sarawak government and Comptroller of the State Sales Tax filed a Writ of Summons and Statement of Claim against Petronas at the High Court Registry in Kuching. 

The legal action was taken to recover the five per cent state sales tax owed by the national oil and gas company to the state.

Petronas had on Nov 25, acknowledged the lawsuit filed against it. In regards to the lawsuit, Sharifah Hasidah was confident that the state government could win the suit based on the provisions under the Federal Constitution.

She reiterated that the five per cent state sales tax imposed on Jan 1, 2019, was the right of Sarawak under the Constitution and the State Sales Tax Ordinance 1998.

“We are only enforcing and exercising our rights under the Federal Constitution. I feel that they cannot challenge our rights to enforce this sales tax,” she said.

According to Sharifah Hasidah, the sum of sales tax to be recovered from Petronas for the period of January until June 2019 was in billions of ringgit.

On Nov 21, DayakDaily had confirmed with a reliable source that Petronas was owing the Sarawak government RM1.29 billion in sales tax for the first half of the year.

Petronas is said to be the only oil and gas company operating in the state which has not paid the sales tax, while other oil companies like Murphy Oil and Petamina have paid theirs.

Prior to the filing of the lawsuit, Sarawak government had in September issued a Notice of Assessment to Petronas to make the necessary payment but the oil company did not respond to the notice.

An extended deadline to Oct 31 was given to Petronas to make the payment. The deadline passed without the payment.

Sharifah Hasidah had explained that Petronas had initially requested the state government not to take any legal action as it had to wait for Putrajaya to give it the ‘green light’ to pay the sales tax.

On Nov 4, Chief Minister Datuk Patinggi Abang Johari Tun Openg had also told the State Legislative Assembly (DUN), when tabling the State Budget 2020, that he was allowing the law to take its course if the payment was not forthcoming. 

He emphasised that Petronas was legally obligated to pay the sales tax under the State Sales Tax Ordinance 1998 and its failure to do so would be tantamount to breaching the law.

Abang Johari also informed that as of Sept 30 this year, the state had collected RM5.653 billion in revenue, and is expected to collect more towards the end of the year. — DayakDaily