We’ll sue

Petronas must pay 5% or face legal action

IF Petronas failed to pay the state sales tax on petroleum, legal action would be instituted to recover the unpaid amount. “Petronas must pay the tax that took effect from Jan 1 this year,” said Chief Minister Datuk Patinggi Abang Johari Tun Openg in his winding-up speech in the state legislature, yesterday.

The tax must be imposed as it has been approved by this House in November last year.

Abang Johari stated that during the inaugural meeting of the Special Steering Committee on Malaysia Agreement 1963 (MA63) in December last year that the state’s constitutional rights to impose the sales tax was strictly non-negotiable.

In connection with the matter, the opposition’s allegation that the Sarawak government is running a presumptuous budget is clearly irresponsible, provocative and underestimated the state government’s strong resolve to take all necessary actions to ensure that the state sales tax on petroleum products would yield the expected amount of revenue.

Abang Johari was addressing a statement by Chong Chieng Jen (PH-Kota Sentosa) alleging that the inclusion of revenue from the state sales tax on petroleum products (when such tax has yet to be collected from Petronas this year) is presumptuous budgeting.

Abang Johari with Awang Tengah after the adjournment of the 18th Sarawak Legislative Assembly (DUN) at the DUN building in Petra Jaya.

To this, Abang Johari stressed that the GPS government would take all necessary actions to ensure that all persons and entities liable to pay the sales tax would pay up.

He further stated that if Petronas wants a reduction of the rate of the tax, the shortfall must be compensated by the federal government through an arrangement with Petronas.

“This is to ensure that the revenue from sales tax on petroleum received for this year and subsequent years will never fall below the sum estimated in our annual budget.

“Nevertheless, Sarawak is able to achieve fiscal sustainability as we adopted a multi-pronged approach in our budget exercise, as I have detailed in my budget presentation.

“We have other sources of revenue on stream, which will ensure a healthy and well-functioning economy, meaning we don’t rely solely on sales tax imposed on Petronas.”

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