Petronas’ zero-rated SST offer unacceptable
KUCHING: Petronas, through the federal government has offered an ex gratia payment of 3 per cent to Sarawak but with a condition the state government drops the sales tax and Oil Mining Ordinance (OMO) 1958.
Assistant Minister in the Chief Minister’s Department (Law, State-Federal Relations and Project Monitoring) Datuk Sharifah Hasidah Sayeed Aman Ghazali said in response to the offer, the Chief Minister Datuk Patinggi Abang Johari Tun Openg has written to the Federal government stating that the Sarawak government would still impose State Sales Tax (SST) on petroleum products exported from the state.
She said the state government also demanded that the SST imposed on liquefied natural gas (LNG), crude oil and condensate exported from Sarawak in 2019 be paid this year.
“The response to the federal government was that the state government is also prepared to reduce the SST rate provided Sarawak be given compensation by Petronas or the federal government to whatever the state lacked in,” she said.
Sharifah Hasidah shared these details during her talk titled ‘Malaysia Agreement 1963’ (MA63) to about 5,000 delegates at the Gabungan Parti Sarawak (GPS) 2019 Convention at Borneo Convention Centre Kuching (BCCK) yesterday.
“The zero-rated SST offered by Petronas and federal government cannot be considered,” she stressed.
She added that Petronas has been issued notice of assessment to pay the RM 1.2 billion SST to the state.
Citing the Malaysia Statistics Department, Sharifah Hasidah said in 2018, the total LNG exported from Sarawak was 27 million metric tonnes valued at RM41.1 billion.
Crude oil exported from Sarawak in 2017 amounted to 3,353,000 metric tonnes worth RM 9.4 billion.
She said Petronas was the only oil and gas company that has yet to pay the 5 per cent SST on petroleum products to the state even though they were given until end of October to pay.
On Nov 5, Abang Johari when tabling the 2020 State Budget, said the Sarawak government would take legal action against Petronas if it failed to pay up.