Petronas challenging Sarawak laws by refusing to pay sales tax – Awang Tengah

Petronas is challenging the rights of Sarawak as enshrined under the Federal and State Constitution by refusing to comply with Sarawak Sales Tax Law , Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan told the august House yesterday.

“It is unfortunate that Petronas, being an international corporation as well as a government link company (GLC) of Federal Government has yet to comply with the payment of sales tax on petroleum products exported out of Sarawak.

“Petronas complies with the law of every other country where they are operating, among them are Canada and Brazil.

“In Canada, they comply with Canadian laws and in Brazil, they comply with Brazilian laws. Why is it that when it comes to their operations in Sarawak, they refuse to comply with Sarawak Laws,” he said in his winding up speech.

Awang Tengah, who is Minister of International Trade and Industry, Industrial Terminal and Entrepreneurs Development, said it is public knowledge that Petronas has extracted hundreds of billions of Ringgits’ worth of petrocarbon resources from Sarawak territory and what Sarawak received was a mere five per cent in royalty.

He noted that Petronas cannot deny that its success was built upon the oil and gas resources from Sarawak and Sabah, especially during its formative years.

He insisted that Petronas should have given back the resources it extracted from the state in the form of sales tax to the Sarawak Government without fail.

This, he said, was in accordance with the Federal Constitution and the Laws of the State of Sarawak.

He lamented it is strange that a Malaysian GLC has chosen to ignore the State law while foreign petroleum companies operating in Sarawak, such as Shell, Murphy and PT Pertamina have all complied.

“In this respect, we fully support the actions taken by the Chief Minister with regard to Petronas and we shall let the law takes its course.

“For the same reason, we stand solidly behind Chief Minister with regard to the issues pertaining to the rights and autonomy of Sarawak under MA63.

“We are only asking for what is rightfully ours, nothing more, nothing less,” he said.

On other matters, he said his Ministry has been tasked to plan and chart the direction for the downstream oil and gas industry, including the development of Industrial Terminal.

This, he said, was in line with the direction of the Chief Minister where 40 to 50 per cent of any new discovery of gas in Sarawak must be retained as feedstock for downstream oil and gas activities in the state.

“In this respect, we will engage a consultant to develop a master plan for this industry,” he said.