Sarawak deputy chief minister slams Petronas over sales tax

Petronas is obliged to pay the sales tax under the State Sales Tax Ordinance 1998.

KUCHING: A Sarawak deputy chief minister took Petronas to task today over the 5% sales tax on petroleum products, accusing the oil giant of having “no shame”.

Deputy Chief Minister Awang Tengah Ali Hasan said the Sarawak government had made it clear that Petronas must comply with the state’s laws and pay the 5% tax.

He added that even foreign companies such as Shell had done so.

“If Petronas can comply with the laws in other countries, why can’t it do the same thing when operating in Sarawak?

“Petronas is an embarrassment,” he said at an event here.

Petronas is legally obliged to pay the sales tax under the State Sales Tax Ordinance 1998.

Earlier, Sarawak Assistant Minister for Law, State-Federal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman Ghazali said Petronas, through the federal government, had offered a 3% “goodwill” payment to Sarawak on its petroleum products.

However, she said Petronas would only pay if the state government dropped its claim on the sales tax and repealed its Oil Mining Ordinance 1958.

“We cannot accept this,” she said. “Petronas has to pay the 5% sales tax on the petroleum products.”

She also said Sarawak Chief Minister Abang Johari Openg had written to Putrajaya stating the state government’s stand on the matter.