Withdrawal of Petronas appeal ‘sweet victory’ for Sarawak, says minister

Petronas has decided to withdraw its appeal against a High Court ruling that Sarawak is entitled to collect 5% sales tax on its petroleum products.

KUCHING: A Sarawak minister has described the withdrawal of Petronas’ appeal against the Kuching High Court ruling that the state is entitled to collect sales tax on petroleum products as a “sweet victory” for the state government.

Tourism Minister Abdul Karim Rahman Hamzah said Petronas’ move confirmed that Sarawak “does have some authority and rights over oil and gas extracted from its territory”.

He said it put aside the notion that Petronas and Putrajaya have full rights over all oil and gas resources in Malaysia.

Karim congratulated Chief Minister Abang Johari Openg as well as the late chief minister Adenan Satem for fighting for the return of such rights to Sarawak.

“This is a sweet victory and, hopefully, Sarawakians will pay back these deeds by giving their full support to the ruling Gabungan Parti Sarawak (GPS) government in the forthcoming state election,” he told FMT.

Assistant Law, State-Federal Relations and Project Monitoring Minister Sharifah Hasidah Sayeed Aman Ghazali also welcomed the withdrawal of the appeal.

“This is a positive move and an indication of a better working relationship and understanding between the state government and Petronas.

“It also indicates Petronas’s acknowledgment and recognition of our constitutional right to impose sales tax on crude petroleum products,” she said in a statement.

In January last year, the Sarawak government imposed a 5% sales tax on Petronas’ petroleum products under the state’s Sales Tax Ordinance 1998.

Petronas, however, refused to pay the tax, saying it was unconstitutional, resulting in the state government’s legal action against it.

On March 13, the Kuching High Court ruled that Sabah and Sarawak had the right under the Federal Constitution to impose sales tax on petroleum products, dismissing Petronas’ bid to declare the Sarawak sales tax null and void.

It was reported earlier today that Petronas had withdrawn its appeal against the High Court’s ruling, and the state government had also withdrawn its cross-appeal.

PSB calls for ‘full disclosure’

In a separate statement, Parti Sarawak Bersatu (PSB) president Wong Soon Koh wanted to know if the state government had made any “concessions” or “settlements” with Petronas over the petroleum sales tax due to the state.

He said the government must provide a “full and transparent disclosure” of what had transpired.

“It is imperative for the state government to reveal the extent of any concession it had to make, if any, in return for collecting payment of the sales tax, which is rightfully and lawfully due and owing to Sarawak.

“Did the settlement include the recognition of the Petroleum Development Act 1974 and the Territorial Seas Act 2012? Both these acts were never passed in the Sarawak state legislative assembly,” he said.

Wong also called for full disclosure of the amounts that Petronas had agreed to pay.

“Are these amounts consistent with the budget figures tabled by the Sarawak finance minister and Chief Minister Abang Johari Openg for the preceding years’ budget?

“PSB asks the state government whether it has given any undertaking to Petronas to gradually reduce the sales tax in future years as had earlier been revealed by (Sharifah Hasidah),” he said.

Wong said if such an undertaking was given, the state government owed the people an explanation on why it had to give such a concession to Petronas.