Petronas has lost goodwill among Sarawakians

Picture from the edgemarkets.com

By Jack Lapidus

PETROLIAM Nasional Berhad (Petronas) has lost plenty of goodwill among Sarawakians by challenging the Sarawak government over the five per cent State Sales Tax (SST), says Mulu assemblyman Datuk Gerawat Gala.

He said the national oil company should be ashamed for refusing to comply and for challenging Sarawak laws when their own production-sharing contractors like Shell, Murphy and Nippon had been compliant, Borneo Post reported.

He pointed out that Petronas had lost for the third time its case against the Sarawak government in regards to the SST on petroleum products produced from Sarawak territory and sold outside the state.

“Thus far, the score is 3-0 for Sarawak. The fourth case pending before the court is Sarawak’s claim against Petronas for the five per cent Sales Tax incurred since January 2019, which Petronas refuses to pay,” he said.

He said Petronas has taken the Sarawak’s oil and gas rights and revenues since the Petroleum Development Act (PDA) 1974 was enacted with the state receiving only five per cent royalty on gross for the past 46 years whereas the federal government has been getting five per cent royalty on gross production, 38 per cent tax under the Petroleum Income Tax Act (PITA) and all the dividends from Petronas and Carigali.

“If Petronas and the federal government were sincere in helping Sarawak, they could reduce the 38 per cent tax under PITA to 33 per cent and give the five per cent to the state,” he said.

Petronas should act like other major oil companies operating in other parts of the world, where they respect and comply with the local jurisdictions and laws and are responsive to the needs of their host states.

“Petronas cannot continue to treat Sarawak as it had over the last 46 years without any change. Sarawakians are better informed now and have progressed over the last 36 years – they expect to be treated equitably and fairly.

“To maintain whatever little goodwill that is left for Petronas for their long-term operation in Sarawak, it would be wise for it to withdraw and discontinue its court case against the Sarawak government and start paying the five per cent service tax,” he said.

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