Datuk Sharifah Hasidah Sayeed Aman Ghazali

KUCHING: There was no discount or reduction given to Petroliam Nasional Berhad (Petronas) or its subsidiaries in regards to the state sales tax (SST) payment amounting to RM2.956 billion.

This has been clarified by Assistant Minister in the Chief Minister’s Department (Law, State-Federal Relations and Project Monitoring) Datuk Sharifah Hasidah Sayeed Aman Ghazali.

She said the amount paid was in accordance with assessments made by the Comptroller under the STT Ordinance, 1998.

“It is not the result of any negotiation for commercial settlement or the relinquishment of any rights over oil and gas found and produced in Sarawak.

“No discount or reduction at all was given to Petronas or its subsidiaries,” she said in a statement on Monday (Sept 21).

She said the SST of RM2.956 billion for 2019 received from Petronas was based on actual volumes of petroleum products sold and the sale value thereof based on returns of sales of these products submitted to the Comptroller of SST and verified by the audited financial statements of the companies in the Petronas Group.

Hasidah said this is a misconception regarding the RM2.956 billion received from Petronas and it was necessary for her to make this clarification.

“Firstly, it is said that the amount received is less than the sum estimated in the 2019 Budget presented to the State Legislative Assembly (DUN) in November, 2018 which was RM3.897 billion.

“When the 2019 Budget was presented in November 2018, natural gas was one of the petroleum products subject to payment of five percent SST. However, on December 13, 2018, the state Cabinet decided to remove natural gas from the list of taxable goods to avoid Liquefied Natural Gas (LNG) being subject to SST twice.

“For example, first, when the LNG Plants in Bintulu purchased the natural gas for manufacturing LNG, and then again when the LNG is sold. Such double taxation on LNG produced in Bintulu would make the selling price for the product uncompetitive in the global market,” she said.

She said the removal of natural gas tax resulted in the estimated SST from petroleum products to be reduced by about RM1 billion.

“Thus, for the budget 2020 presented to the Dewan in November 2019, the estimated amount of revenue from SST levied on petroleum products is RM2.8 billion,” she said.

Hasidah said the sum paid by Petronas group and other oil companies exceeded the actual amount of SST estimated for 2019 when natural gas was excluded as a taxable item.