Sarawak sues Petronas over sales tax for petroleum products

KUCHING: A Sarawak assistant minister says the state government has taken legal action against oil giant Petronas over its refusal to pay the 5% sales tax on petroleum products.

“The controller of the state sales tax, Sarawak and the state government filed a writ of summons and statement of claim at the High Court registry in Kuching today against Petronas to recover the sums due,” Assistant Minister for Law, State-Federal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman Ghazali said in a statement.

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

This comes a day after Deputy Chief Minister Awang Tengah Ali Hasan accused Petronas of having “no shame” in refusing to pay the tax.

He said even foreign companies such as Shell had done so.

Sharifah previously 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However, she said Petronas would only pay if the state government dropped its claim on the sales tax and repealed its Oil Mining Ordinance 1958.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. Petronas has to pay the 5% sales tax on the petroleum products,” she said.

On Nov 4, Sarawak Chief Minister Abang Johari Openg said the state government had issued a notice of assessment to Petronas for payment of the 5% sales tax on petroleum products.

He also said the state government would allow the law to take its course if Petronas failed to make the payment.