The petroleum product sales tax, besides being a constitutional right for the state, is vital to its sustained development, particularly in infrastructure building and to supplement other sources of income, said Teo. File Photo
KUCHING: The state government has the right to take legal action against companies and their subsidiaries that refuse to pay the five per cent sales tax on petroleum products, said Progressive Democratic Party (PDP) vice president Teo Boon Siew.
In a statement released today, the PDP Dudong branch chairman stated that the imposed sales tax was legitimate under the state constitution.
“Does the federal government allow companies and individuals to dodge their respective tax payments or take legal action against them?
“In the same principle, the Sarawak government has the right under the rule of law to take legal action against companies and their subsidiaries that refuse to pay the imposed tax.
“Additionally, Sarawak Democratic Action Party (DAP) had also erroneously claimed that Chief Minister Datuk Patinggi Abang Johari Tun Openg included the tax as part of the state’s revenues in the previous budget, but Petronas and the Sarawak government have not come to an agreement on this issue.
“The petroleum product sales tax, besides being a constitutional right for the state, is vital to Sarawak’s sustained development, particularly in infrastructure building and to supplement other sources of income, ” he added.
He further questioned whether the state DAP is going to allow Petronas to continue to refuse its tax obligations to Sarawak, whereas other petroleum companies had agreed to make those payments.
“Sarawak DAP chairman Chong Chieng Jen himself has declared this country to be run by rule of law. Is the DAP now allowing selected parties to be above the law? DAP has obviously failed to adhere to the rule of law by allowing this to happen.
“Finance Minister Lim Guan Eng harps on the supposedly dire straits of the federal government finances but continues to enjoy the contributions from Sarawak and depriving the state of its due revenues.
“With Prime Minister Tun Dr Mahathir Mohamad and Lim’s announcements last year that Petronas will pay out RM54 billion in total dividends to the federal government, it is wholly unreasonable for the petroleum giant to refuse Sarawak’s 5% sales tax.”
Teo reminded the state’s DAP leaders to remember their roots as they were still part of Sarawak as it was incumbent upon them to support the state by urging the federal government to make good on its tax obligations to Sarawak, instead of asking the state government to forego its rightful claim to its resources and revenues.