Sarawak stands firm on oil and gas sales tax
KUCHING: The ongoing negotiations between Petroliam Nasional Berhad (Petronas), federal and state governments are to reach a commercial agreement on oil and gas matters, says Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan.
“It is fallacious for Batu Lintang Assemblyman See Chee How to say that the negotiations are about the state sales tax. The stand taken by the government on the state sales tax is firm and remains unmoved from the day the state sales tax was imposed by the state,” he said in a statement.
In a joint statement with the state government in May, Petronas had agreed to pay in full the state sales tax (SST) imposed on petroleum products for the year 2019, amounted to RM 2 billion.
The deputy chief minister reiterated that Petronas will have to pay the SST in accordance of the law and added both federal government and the national oil corporation accepted the stand and had committed to paying the tax.
On Tuesday, See announced he had tendered his resignation as a member of the Sarawak State Legislative Assembly (DUN) Malaysia Agreement 1963 (MA63) Consultative Committee.
“With my resignation, I wish to put on record my fervent protest against any unauthorised, illegitimate and improper conduct of the Sarawak State Government which may arise from the lack of transparency in its negotiation with Petronas and the federal government for settlement of the state sales tax owed by Petronas to Sarawak, acting outside the purview of the Sarawak State Legislative Assembly and the MA63 Consultative Committee,” said See during a press conference that day.
Awang Tengah is the chairman of a working committee that had been granted executive power by the state government to negotiate the state's oil and gas issues with the federal government and Petronas .
Awang Tengah pointed out Petronas had undertaken to withdraw its appeal to the Court of Appeal against a High Court ruling on the SST in favour of the state and the present negotiations were intended to realise a few objectives, including allowing the state to reclaim its regulatory role in oil mining in the state.
“It is also to increase its share of revenue from oil and gas produced in Sarawak and to obtain greater investment opportunities in downstream business, such as in the liquefied natural gas plants in Bintulu by the state government and Petroleum Sarawak Berhad (Petros),” said Awang Tengah.
Moreover, the negotiations are to ensure more opportunities would be given for Sarawakian companies in oil and gas industry, the deputy chief minister added.
“(It is also) to guarantee a greater allocation and more secured supply of gas to meet the gas requirement of the state, to be determined by a gas master plan which is currently under preparation as well as to grow the gas business in Sarawak,” said Awang Tengah.
He said these discussions were conducted with due recognition of the rights of the state under the federal constitution and on the understanding that the mentioned objectives would be achieved without going through legal process.
“In the event that any legal or constitutional issues should arise, these would be referred to the DUN Consultative Committee for deliberation,” stressed Awang Tengah.
In a response to See's accusations, Assistant Minister of Law, State-Federal Relations and Project Monitoring Datuk Sharifah Hasidah Sayeed Aman Ghazali had also clarified on Facebook on Wednesday that the ongoing negotiations with Petronas were not over the SST but they were purely commercial in nature.
Meanwhile, Bukit Assek assemblywoman Irene Chang and Tanjong Batu assemblyman Chiew Chiu Sing - both from Democratic Action Party (DAP) - said they stood with See in protest over the actions of not involving the consultative committee's negotiating team in the commercial negotiations with Petronas and federal government, but both will remain in the consultative committee.