Friday, July 30

Petronas chairman: We’re working closely with Sarawak govt to resolve state sales tax issue

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Petronas is working closely with the state government and negotiating on the five per cent sales tax issue, said its chairman Datuk Ahmad Nizam today. File Photo

KUCHING: Petroliam Nasional Berhad (Petronas) is working closely with the Sarawak government with regard to the payment of the five per cent state sales tax on petroleum products.

“We are still negotiating with the state government for the payment of the five per cent sales tax and we are also working closely with them to resolve the issue,” said Petronas chairman Datuk Ahmad Nizam Salleh when met by reporters at the Petrosains Playsmart exhibition at Civic Centre here today.

He also said that the federal government will also be involved in the negotiation process.

When asked by reporters as to when will the meeting take place, he said he will leave it to the federal government to decide on it.

The State Sales Tax was approved by the State Legislative Assembly in November last year and took effect from Jan 1 this year.

The national oil company was required to pay the five per cent sales tax imposed by the state government by the end of September.

In October, Chief Minister Datuk Patinggi Abang Johari Tun Openg revealed two foreign oil companies – Shell and Murphy Oil – had paid the sales tax.

Meanwhile, Petronas had not paid the sales tax even after the company exceeded the given deadline.

On November 4, he told the State Legislative Assembly that the state government had issued a Notice of Assessment (NoA) to Petronas over the company’s outstanding payment of the sales tax.

Abang Johari, who was delivering the 2020 State Budget speech, said Petronas is required to pay the overdue sales tax to the state government as stipulated under the existing legal work.

“Under the State Sales Tax Ordinance 1998, Petronas is legally obligated to pay the State Sales Tax and their failure to do so would be tantamount to breach of the law,” he told the august House.