Abang Johari (seated centre) with (seated from left) his deputies Datuk Amar Awang Tengah Ali Hasan and Datuk Amar Douglas Uggah Embas; Finance Minister Senator Datuk Seri Tengku Zafrul Tengku Abdul Aziz; and Ahmad Nizam speaking during the press conference. Also seen are (standing from left) Assistant Minister in the Chief Minister’s Department (Law, State-Federal Relations and Project Monitoring) Datuk Sharifah Hasidah Sayeed Aman Ghazali; Local Government and Housing Minister Datuk Seri Dr Sim Kui Hian; Senior Minister (Works) Datuk Seri Fadillah Yusof; Petronas Board of Directors member Datuk Ibrahim Baki; and Petronas chief executive officer Tengku Muhammad Taufik Tengku Aziz. Photo: UKAS

KUCHING: Petroliam Nasional Berhad (Petronas) and its subsidiaries fully settled their outstanding payment of State Sales Tax (SST) worth RM2,956,671,407.36 on petroleum products for 2019 to Sarawak today.

Chief Minister Datuk Patinggi Abang Johari Tun Openg received a mock cheque from Petronas chairman, Tan Sri Ahmad Nizam Salleh in a simple presentation ceremony at Wisma Bapa Malaysia here.

The chief minister said that the payment was assessed by the Comptroller of State Sales Tax in accordance with the provisions of the Sarawak State Sales Tax Ordinance, 1998.

“The payment of SST by Petronas and its subsidiaries is the result of a settlement reached between Petronas, the federal government, and the state government, whereby Petronas upon reaching an agreement to withdraw its judicial review appeal to the Court of Appeal, thereby and thus, recognising the state’s constitutional power to impose the tax, the discontinuance of civil case by the State against Petronas was then withdrawn,” he said.

Abang Johari added that following this settlement of the legal proceedings, Petronas and its subsidiaries had registered as ‘taxable persons’ and submitted their returns to the Comptroller of State Sales Tax.

Abang Johari said that as a result of this, the Comptroller had made an assessment of the tax due and Petronas and its subsidiaries were issued with the relevant notices under the Ordinance on Sept 10 this year.

Therefore, he explained that the amount paid by Petronas and its subsidiaries did not include penalties and interest.

He said that the payment received would be added to Sarawak’s revenue and be used to develop the state.

On another note, he said, “SST for this year, 2020, will be paid when an assessment has been made based on the volume of the petroleum products, namely crude oil, condensates, urea and liquefied petroleum gas actually sold and the sale value of these products.

“The state would also like to take this opportunity to thank Shell, Murphy Oil, Pertamina and Sapura OMV which have earlier complied and settled the taxes due to the state,” he said, adding that this sum from the other oil companies amounted to RM138 million.

Abang Johari said that the state government would now focus on discussions with the federal government to reach a commercial settlement on other matters relating to oil and gas found and produced in Sarawak.

The five percent SST on petroleum products for export was imposed by the Sarawak government starting Jan 1, 2019 under the State Sales Tax Ordinance 1998.

Petronas was the only oil and gas company operating in the state which refused to pay the SST, leading Sarawak to take legal action against the national oil and gas corporation.