Ball in Petronas’ court: JC Fong

KUCHING: It is now Petroliam Nasional Berhad’s (Petronas) move to make in terms of paying the state its five percent sales tax on oil and gas.

The national oil and gas company has yet to settle the tax payment to the state government and was questioned over its reluctance to pay up its dues.

“Petronas said SST will affect the profits or dividends that it can give to the federal government. It said it needs Putrajaya to okay for it to pay (the taxes),” said Sarawak legal counsel Datuk Seri J.C Fong in a press conference at the DUN building here yesterday.

“They are saying that ‘we can pay’. In fact they asked us not to sue them because they want to solve the matter with the federal government.”

Fong lamented the fact that Putrajaya has been holding back due to them not getting their proper cut.

“From the tax, the state ought to earn RM3 billion annually, the federal revenue for 2019 is RM231 billion, if the federal government has to sacrifice RM3 billion, that amounts to less than 1.5 percent of the federal revenue for this year.

“So in percentage terms, it is so small, but I heard that someone said that our claims are unreasonable. What is RM3 billion compared to RM231 billion?,” said Fong quoting the figure of the nation’s revenue from last week’s edition of The Edge.

“Are we unreasonable? Is the state unreasonable? Bearing in mind, over the years we have contributed a lot to federal coffers, RM660 billion from our oil and gas, which excludes the Liquified Natural Gas (LNG) profits of over RM40 billion.

The veteran lawyer pointed out that the federal government should refer to its idea of the shared prosperity vision mooted by Prime Minister Tun Dr Mahathir Mohamad last month.

“If you have RM231 billion, why not give us RM3 billion more? That is surely shared prosperity on a regional basis.

“Our contribution to the nation’s GDP is very substantial. We are the third highest contributor after Selangor and Penang.”

Fong insisted that Sarawak is not picking up a fight with Petronas and the federal government.

“We are not asking for 20 percent oil royalty, we are asking for two things. One is a fair share of the oil and gas revenue derived from production in Sarawak and more opportunities for the state government, Sarawak companies and its people to participate in the industry.”

Fong believed with Sarawak involved in oil and gas industry, it will help the state to be an active participant and enable Sarawakians to participate in the industry.

“We want more share in the LNG plant, but we are not asking for free share, we are asking for shares based on arm’s length transaction.

“In terms of upstream, we are asking for a share in those production areas belonging to Petronas Carigali. We are saying that if you own the exploration area, we want to have a share in that. We are not asking for something extraordinary,” he added.