Petronas’ refusal to comply with Sarawak’s sales tax Law is tantamount to challenging the rights of the state as enshrined under the Federal and State Constitutions, the August House was told. — Reuters file photo
KUCHING: Petronas’ refusal to comply with Sarawak’s sales tax Law is tantamount to challenging the rights of the state as enshrined under the Federal and State Constitutions, the State Legislative Assembly was told.
Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan said the national oil company ought to respect the state’s tax law, adding: “When in Rome, do as the Romans do. Kalau di Sarawak, ikutlah undang-undang Sarawak (when in Sarawak, abide by Sarawak laws).”
“It is unfortunate that Petronas, being an international corporation as well as a government linked company of the 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 today.
He said it was public knowledge that Petronas had extracted hundreds of billions of ringgit worth of petro-carbon resources from Sarawak and what the state received was a mere five per cent in royalty payments.
Awang Tengah, who is also International Trade and Industry, Industrial Terminal and Entrepreneurs Development Minister II, said it was strange that a Malaysian GLC had ignored the state law when foreign companies operating in Sarawak, such as Shell, Murphy and PT Pertamina, have all complied.
“In this respect, we fully support the action 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 (Malaysia Agreement 1963).
“We are only asking for what is rightfully ours, Nothing more, nothing less,” he said.
In a separate development, 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 finding of gas produced 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.