Petronas’ appeal against Sarawak’s sales tax fixed for June 23

By Emma Victoria

DESPITE an agreement to pay the Sarawak government RM2 billion in sales tax for petroleum products, Petronas is appealing an earlier High Court decision that the state is entitled to collect the tax. Hearing has been fixed on June 23 in the Court of Appeal in Putrajaya.

This is based on the filing listed on the Federal Court chief registrar’s website.

A screenshot from the Federal Court’s website

On May 8, the Sarawak state government and Petronas issued a joint-statement saying that the national oil company has agreed to pay in full the petroleum products sales tax imposed by Sarawak for the year 2019, which is in excess of RM2 billion, or 5 per cent of the products’ sales value.

The statement stated that Petronas has retracted its appeal against a decision by the Sarawak High Court to dismiss Petronas’ request for a judicial review to declare the State Sales Tax imposed by the Sarawak Government as null and void.

In return, the Sarawak State Government has dropped all claims in its civil case against Petronas for the payment of petroleum products sales tax.

This came as the two parties had reached an agreement on the management of Sarawak’s oil and gas assets, and the sales tax on petroleum products, the statement had said.

However, Sarawak Consultative Committee on Malaysia Agreement 1963 (MA63) chairman Datuk Amar Mohd Asfia Awang Nassar on Wednesday said that Petronas had yet to pay the sales tax that was due to the state and instead filed an appeal over the matter at the Court of Appeal.

Mohd Asfia, who is also the Sarawak state legislative assembly speaker, said the Sarawak state government would continue its civil case against Petronas if no decision is reached through negotiations with the company.

Mohd Asfia said the joint-statement was only a press release and not a formal agreement.

“It was a statement based on discussions back then, and today, I am making it clear that we will continue our civil case against Petronas. Our sales and service tax is non-negotiable,” he added.

On March 13, High Court Justice Azhahari Kamal Ramli ruled that according to the Federal Constitution, Sabah and Sarawak had the right to impose sales tax on their petroleum products.

Justice Azhahari also rejected Petronas’ application to file a judicial review to declare Sarawak’s sales tax invalid and void.

Sarawak had imposed a 5 per cent sales tax on petroleum products on Jan 1 last year under the state’s Sales Tax Ordinance 1998.

Sabah Chief Minister Datuk Seri Shafie Apdal had in April said the state had also implemented a 5 per cent sales tax on all petroleum products in the state with effect from March.

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