RM2.95 bil SST from Petronas ‘comes timely’ for development projects, says Sarawak

Petronas has agreed to pay Sarawak 5% sales tax on petroleum products. (AFP pic)

KUCHING: The RM2.95 billion sales tax settlement on petroleum products from Petronas “comes timely” as many industries and development projects in Sarawak have been affected by the Covid-19 pandemic.

State Tourism, Arts, Culture, and Youth and Sports Minister Abdul Karim Rahman Hamzah said the money would be used for development projects which will benefit the state and its people in the long run.

He also said this negated former finance minister Lim Guan Eng’s claim that the state’s 5% sales tax on petroleum products was not justified as it could increase costs and that investors might not want to invest in the oil and gas (O&G) industry in Malaysia.

“Likewise, even Dr Mahathir Mohamad didn’t seem to be supportive when he was the prime minister. It was the determination of our Chief Minister Abang Johari Openg that led to this victory,” he told FMT.

Abdul Karim Rahman Hamzah

Karim also said it would not be surprising if DAP spun it as “election candies”.

Meanwhile, Bukit Assek assemblyman Irene Chang urged Putrajaya to reveal the terms of settlement among Petronas, and the state and federal government.

She said it was good that Petronas finally paid the state sales tax (SST) on petroleum products, “but this should never be done at the expense of any concession being made by Sarawak to Petronas which might threaten our rights and interest as Sarawakians”.

Chang said a joint statement issued in May by Sarawak Assistant Minister in the Chief Minister’s Department (Law, State-Federal Relations and Project Monitoring) Sharifah Hasidah Sayeed Aman Ghazali and Petronas chairman Ahmad Nizam Salleh stated that the purported terms of settlement included the recognition of Petronas as a national oil company with full authority over regulating the entire development of the country’s O&G industry, including those in Sarawak.

“This is in contradiction to the stance taken by the state government all this time that the Petroleum Development Act 1974 is unconstitutional and null and void and therefore unenforceable in law.

“Hence, I urge the state government to practise transparency and accountability and disclose to the people the full details on the terms of settlement,” she said.