Petronas settlement sign of good things to come, says PDP vice-president

Datu Penguang Manggil

By Lian Cheng

KUCHING, Aug 6: The amicable settlement of the State Sales Tax (SST) issue between the state government and Petronas augurs well for Sarawak’s ongoing fight to restore its lost rights enshrined under MA63.

Progressive Democratic Party (PDP) vice-president Datu Penguang Manggil said the settlement of the case indicates a good beginning for Sarawak.

“It (the settlement) augurs well for us. It indicates a good beginning in our negotiations to restore and protect our rights under MA63 (Malaysia Agreement 1963).

“We have to also thank the federal government for honouring MA63. The amicable settlement on SST issue is just one of the many negotiations that are ongoing in the pipeline.


“We will expect more negotiations with two committees being set up to discuss Sarawak’s rights based on MA63,” Penguang told DayakDaily 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.

Penguang who is also the Local Government Assistant Minister said that has been why it is important that both the federal and Sarawak governments stay on.

“This can only be done under the present federal government. When Pakatan Harapan was in the government, there were negotiations upon negotiations and nothing was done.

“It is only under the present federal government that something concrete finally materialised. That is why Gabungan Parti Gabungan Sarawak (GPS) supports this present federal government.

“Same thing applies to the state government. The stability of the state government must be maintained or we will lose our direction and focus,” said the assemblyman. — DayakDaily