Sarawak govt welcomes Petronas moves to withdraw appeal over state sales tax on petroleum products

Sulok Tawie
·2-min read
Sarawak assistant law minister Datuk Sharifah Hasidah Syeed Aman Ghazali said the withdrawal indicates Petronas’s acknowledgment and recognition of the state’s constitutional right to impose SST on crude petroleum product.. — Picture by Sulok Tawie
Sarawak assistant law minister Datuk Sharifah Hasidah Syeed Aman Ghazali said the withdrawal indicates Petronas’s acknowledgment and recognition of the state’s constitutional right to impose SST on crude petroleum product.. — Picture by Sulok Tawie

KUCHING, Aug 3 — Sarawak today welcomed Petroliam Nasional Berhad’s (Petronas) withdrawal of its appeal against the Kuching High Court’s ruling on the state sales tax (SST), saying that it is a positive move and an indication of a better working relationship between the state government and the oil company.

Assistant Minister of Law, State-Federal Relations and Project Monitoring Datuk Sharifah Hasidah Sayeed Aman Ghazali said the withdrawal indicates Petronas’s acknowledgment and recognition of the state’s constitutional right to impose SST on crude petroleum product.

“Crucially, this also indicates Petronas’s willingness to comply with our state laws.

“All things considered, I see this as a clear and positive way forward for all,” she said in her statement.

She assured that the state government will always protect Sarawak’s rights.

The state government, at the same time, has also withdrawn its cross-appeal over jurisdiction issue of the High Court on the state sales tax (SST).

A three-man bench of the Court of Appeal comprising justices Datuk Abdul Karim Abdul Jalil, Datuk Hadhariah Syed Ismail and Datuk Mohd Sofian Abd Razak struck out the appeal and cross-appeal and ordered each party to bear their own costs.

On March 13, this year, the Kuching High Court ruled that Article 95B (3) of the Federal Constitution provided that the Legislature of Sabah and Sarawak may make laws for the imposition of sales tax.

The High Court judge Azhahari Kamal Ramli said that the provision stated that any sales tax imposed by state law to be deemed among the matters enumerated in the state list, the State Sales Tax Ordinance and any subsidiary legislation made thereunder, is constitutional and valid.

He dismissed Petronas’s judicial review application to quash the notices of assessment issued by the Sarawak state government seeking the oil and gas company to pay RM1.3 billion in SST.

Petronas sought, among others, a declaration of certain sections of the notices as ultra vires to the Federal Constitution and null and void, and also sought a certiorari order that the notices dated August 28, 2019, October 7, 2019, and November 13, 2019, issued by Sarawak state government to Petronas to be quashed.

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