Petronas pays 2019 taxes owed to Sarawak

National O&G company says payment for 2020 will be made upon assessments by Sarawak Comptroller of State Sales Tax


PETROLIAM Nasional Bhd (Petronas) has settled the amount sought by the Sarawak state government for the retail sales of petroleum products last year.

In a statement yesterday, the state-owned oil and gas (O&G) company said the payment represents Petronas’ full and final settlement of the state sales tax for 2019.

“Petronas is pleased to announce that the Petronas group of companies have paid the Sarawak state sales tax for year 2019.

“The payment represents Petronas’ full and final settlement for the sales tax for the year 2019 and is evidence of Petronas’ commitment towards achieving commercial resolution.

“This is a significant milestone following Petronas’ withdrawal of the appeal against the judicial review decision and also Sarawak’s withdrawal of the civil action on the Sarawak sales tax,” it said.

The O&G firm said the payment calculated for 2020 will be made upon assessments by the Sarawak Comptroller of State Sales Tax.

“Petronas is committed to working with the Sarawak government in strengthening Sarawak’s O&G sector towards creating a stable and conducive business and investment environment for future growth.”

Petronas and Sarawak were in legal tussles before the former agreed on a tax payment amounting to about RM2 billion, which is 5% of the products’ sales value.

Previously, Petronas had appealed against the sales tax on petroleum products demanded following the Kuching High Court’s decision to allow Sarawak to impose a state law to collect taxes on sales of petroleum products from January 2019 onwards.

Petronas also seeked to nullify the RM1.3 billion sales tax issued by Sarawak’s Comptroller of State Sales Tax, however, company said it would withdraw the legal action against Sarawak on grounds that both parties were finalising an agreement.

Both parties agreed for the reduction in future petroleum products sales and staggered depending on future negotiations under the State Sales Tax (Taxable Goods and Rate of Tax)(Amendment)(No 2) Order, 2018.

Petronas reported a quarterly net loss of RM21 billion in the second quarter ended June 30, 2020, due to huge impairments on assets. It recorded a RM16.5 billion loss in the first half of 2020.