No discount on Petronas tax bill, says assistant minister

The Sarawak state government and Petronas have reached an agreement on a dispute over state sales tax levied on petroleum products obtained from the state. (Reuters pic)

KUCHING: The Sarawak state government today dismissed a claim by former finance minister, Wong Soon Koh that it has agreed to accept a vastly reduced payment of state sales tax from Petronas for petroleum products obtained from the state.

State assistant minister of law Sharifah Hasidah Sayeed Aman Ghazali said Wong’s claim was “completely untrue and misleading”. He had claimed that the anticipated oil and gas tax for 2019 and 2020 totalling RM6.775 billion was reduced to RM2 billion .

Hasidah said the settlement called for Petronas to pay the 2019 tax in full to the Sarawak government, amounting to around RM2 billion, excluding statutory late payment penalties and interest.

The precise amount is still under computation.

“The SST for 2020 remains at 5% of the sale value of the petroleum products. Only Notices of Assessment for the first quarter of 2020 have been issued. There is no agreement yet for the reduction of SST for the current year 2020,” she said in a statement.

She said the RM2 billion amount excluded SST from other oil companies such as Shell, Murphy Oil, Pertamina, and others operating in the state. The amount of SST to be collected in 2020 has yet to be ascertained.

Wong, who is president of Parti Bersatu Sarawak, a local opposition party, said the state was anticipating oil and gas tax revenue of RM6.775 billion for the two years 2019 and 2020.

“Now we have found out that the Sarawak government has to settle for a vastly reduced sum of only RM2 billion instead of RM6.775 billion,” he said.

He said the chief minister, Abang Johari Openg, who is also state finance minister, must explain how the state government would account for the budget deficit for 2019 and 2020 in light of the huge drop in income.

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