State, federal govts to discuss, reach commercial settlement on oil and gas in Sarawak

Abang Johari (seated third right) at the press conference after the cheque handover.

By Adrian Lim and Ling Hui

KUCHING, Sept 17: The Sarawak government will now focus on discussions with the federal government to reach a commercial settlement on other matters relating to oil and gas found and processed in Sarawak.

Chief Minister Datuk Patinggi Abang Johari Tun Openg disclosed this after receiving the cheque for RM2.96 billion on behalf of the state government from Petroliam Nasional Berhad (Petronas) chairman Tan Sri Ahmad Nizam Salleh for the settlement of outstanding State Sales Tax (SST) on petroleum products for 2019 at a handover ceremony here today.

The exact amount paid by Petronas and its subsidiaries was RM2,956,671,407.36 as assessed by the Comptroller of State Sales Tax in accordance with the provisions of the Sarawak State Sales Tax Ordinance, 1998.

“SST for this year would be paid when assessment has been made based on the volume of petroleum products, namely, crude oil, condensates, urea and liquefied petroleum gas actually sold and the sale value of these products,” he told a media conference at Wisma Bapa Malaysia here today.


The payment of SST by Petronas and its subsidiaries, Abang Johari pointed out, was the result of a settlement reached between Petronas, the federal government and the state government.

“Petronas upon reaching an agreement to withdraw its judicial review appeal to the Court of Appeal, thereby and thus, recognising the state’s constitutional power to impose the tax, the discontinuance of civil case by the state against Petronas was then withdrawn,” he said.

Following this settlement of the legal proceedings, he added that Petronas and its subsidiaries have been registered as ‘taxable persons’ and submitted their returns to the Comptroller of State Sales Tax.

“Consequently, the Comptroller has made an assessment of the tax due and Petronas and its subsidiaries were issued with the relevant notices under the Ordinance on Sept 10, 2020,” he said.

On behalf of the Sarawak government, Abang Johari also took the opportunity to thank Shell, Murphy Oil, Pertamina and Sapura OMV who had earlier complied with and settled the taxes due to the state. — DayakDaily