Petronas finalising agreement with Sarawak on sales tax with view to withdraw appeal

PUTRAJAYA (June 23) : Petroliam Nasional Bhd (Petronas) has informed the Court of Appeal that it is finalising an agreement with the Sarawak state government and the comptroller of state taxes in relation to the RM2 billion in sales tax sought by the state for last year.

As such, Petronas counsel Datuk Malik Imtiaz Sarwar informed the three-member bench that it sought a short adjournment of its appeal.

Sarawak counsel Datuk Seri JC Foong informed the court that the state was with the view of a withdrawal of the appeal (for judicial review).

Justice Datuk Seri Kamaludin Md Said then fixed Aug 3 for the next date.

The other judges on the panel were Justice P Ravinthran and Justice Datuk Abu Bakar Jais.


Read : Petronas’ appeal against RM2b Sarawak petroleum sales tax to be heard today


Sarawak has been pushing hard in recent years to assert ownership of its resources after a promise for a greater share of petroleum royalties failed to take shape. Sarawak and neighbouring state Sabah produce much of the nation’s petroleum wealth.

Sarawak introduced a sales tax, which covers crude oil, gas and liquefied natural gas, on Jan 1, 2019. The tax is deducted from revenue, which effectively is a 5% add-on to the actual royalty rate of 10%.

The tax — estimated to generate at least RM3.9 billion per year — is intended to be a new source of revenue to drive Sarawak’s development agenda. Petronas is the only operator that has failed to pay the tax.

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