Where is Petronas’ respect for Sarawak’s laws?

Datuk Amar Awang Tengah Ali Hasan

By Peter Sibon

KUCHING, Nov 12: Minister of International Trade and Industry, Industrial Terminal and Entrepreneur Development Datuk Amar Awang Tengah Ali Hasan today questioned Petronas’ refusal to pay the state’s sales tax.

He said it was unfortunate that Petronas, an international corporation as well as a federal government-linked company (GLC) has yet to comply with the payment of sales tax on petroleum products exported from Sarawak.

“Petronas complies with the law of every other country where they are operating — among them are Canada and Brazil. In Canada, they comply with Canadian laws and in Brazil, they comply with Brazilian laws.

“Why is it that when it comes to their operations in Sarawak, they refuse to comply with Sarawak’s laws? Petronas ought to respect our Sarawak sales tax law. When in Rome, do as the Romans do. ‘Kalau di Sarawak, ikutlah undang-undang Sarawak’ (When you are in Sarawak you have to follow our laws),” Awang Tengah said during his winding-up speech at the State Legislative Assembly here today.

He asserted that Petronas had extracted hundreds of billions of ringgit’ worth of petro-carbon resources from Sarawak’s territory and what the state received in return is a mere five per cent in royalty payments.

“Petronas cannot deny that its success is built upon the oil and gas resources from Sarawak and Sabah, especially during its formative years. Petronas owes Sarawak and Sabah. It should pay back what it owes in terms of sales tax to the Sarawak government without delay. This in line with both federal and Sarawak laws,” he said.

Awang Tengah, who is also Deputy Chief Minister, said he was flabbergasted as to why Petronas as a federal GLC has chosen to ignore Sarawak’s laws while foreign petroleum companies operating here, such as Shell, Murphy and PT Pertamina have all complied.

“Petronas’ refusal to comply is tantamount to challenging the rights of Sarawak as enshrined under the Federal and State Constitutions. In this respect, we fully support the actions taken by The Right Honourable Chief Minister with regards to Petronas and we shall let the law take its course.

“For the same reason, we stand solidly behind The Right Honourable Chief Minister with regard to the issues pertaining to the rights and autonomy of Sarawak under MA63 (Malaysia Agreement 1963). We are only asking for what is rightfully ours. Nothing more, nothing less,” he said.

Awang Tengah disclosed Sarawak begun imposing sales tax levies on crude palm oil, crude palm kernel oil and lottery tickets since 1998 after the august House passed the State Sales Tax Ordinance, in exercise of the powers conferred by Article 95B(3) of the Federal Constitution.

As such, there is nothing new on the imposition of the sales tax on goods identified by the Sarawak government.

“Every responsible corporate citizen operating in Sarawak must comply with our laws, including our tax laws,” he said. — DayakDaily