Sarawak has also dropped all claims in its civil case against Petronas for the SST payment

pic by TMR FILE

THE Sarawak state government’s right to impose sales tax on petroleum products will no longer be questioned by Petroliam Nasional Bhd (Petronas) after the company decided to drop legal action against the state, said Deputy Minister in the Prime Minister’s Department (Sabah and Sarawak Affairs) Datuk Hanifah Hajar Taib.

She said Petronas’ withdrawal of its appeal against a High Court ruling to award Sarawak a payment of backdated state sales tax (SST) on oil products meant that there would be no more dispute on the matter as the initial court decision is affirmed.

Hanifah Hajar said this is further attested by Petronas’ move to register seven of its subsidiaries, including Petronas Carigali Sdn Bhd, as taxable persons liable for payment of SST to the state government.

Sarawak has also dropped all claims in its civil case against Petronas for the payment of the SST.

“As such, there are no more court cases between Sarawak and Petronas,” Hanifah Hajar told the Dewan Rakyat yesterday. She said this in response to a supplementary question by Datuk Seri Rohani Abdul Karim (GPS-Batang Lupar) on the status of cases involving the two sides.

Petronas recently reached an out-of-court settlement with the Sarawak state government, ending a dispute over the payment of some RM1.3 billion sales tax. The compromise is expected to see other oil-rich states follow suit by demanding a bigger share of the company’s oil money.

Meanwhile, Hanifah Hajar said the government was finalising the composition of a special counsel to discuss and monitor the implementation of Malaysia Agreement 1963 (MA63) and that it would be brought to the Cabinet for consideration soon.

“Apart from the council, a joint committee between the federal government and Sarawak has been set up to discuss the issue of oil and gas.

“The prime minister has given a mandate to the finance minister and the senior minister (works) to discuss the issue with the Sarawak state government and Petronas to reach a commercial solution. Based on the information received, discussions with Sabah will follow suit,” she said.

Hanifah Hajar added that there was no need for a parliamentary select committee (PSC) to be established to oversee the implementation of the MA63.

“For the time being, the government is of the opinion that the formation of a special counsel will suffice and there is no need for a PSC to be established for said purpose,” she said.

So far, 17 out of 21 issues related to MA63 have been solved. They include claims to export duties for logs and forest products in Sabah, state’s authority over health issues in Sarawak and Sabah, and regulation of gas and electricity distribution in Sarawak and Sabah.

Four issues are still being discussed, namely on oil royalty and petroleum cash payments, oil minerals and oil fields, Territorial Sea Act 2012 (Act 750) and state rights over the continental shelf.