Discussion on petroleum between Sarawak govt and Petronas to continue - Abang Johari

KUCHING, Jan 3 (Bernama) – Sarawak Chief Minister Datuk Patinggi Abang Johari Tun Openg said discussions on petroleum issues between the Sarawak government and Petroliam Nasional Berhad (Petronas) will be continued.

He said this had been agreed upon by Prime Minister Tun Dr Mahathir Mohamad at a Special Cabinet Committee Meeting held on Dec 17 following a proposal by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali.

Abang Johari said the meeting was proposed as Petronas had taken cautious measures following Sarawak's interest to participate in downstream and upstream oil and gas activities in the state.

He said that at the meeting on Dec 17, Finance Minister Lim Guan Eng had expressed the opinion that the sales tax imposed on petroleum products beginning Jan 1 this year was inappropriate, but the state government had emphasised that it was the right of the Sarawak government and it was being implemented under Article 95C and Schedule Ten of the Federal Constitution.

“Sarawak also felt that it must take into consideration the Petroleum (Income Tax) Act (PITA) imposed by the federal government,”he said.

Asked further, Abang Johari said Sarawak could actually impose a higher tax percentage, for example 10 per cent but the Sarawak state government also considered the current economic situation.

He said the Finance Minister had cited the inappropriateness of imposing the sales tax on grounds that it could raise costs and drive away investors in the oil and gas industries from Malaysia.

“But my reply to him is the right to impose tax is allowed under the constitution if it is not competitive to the federal government and the federal government could recalibrate the tax structure as currently the federal government also impose petroleum income tax at 38 per cent,” he said.

In this regard, Abang Johari is proposing the federal government to reduce the petroleum income tax to 33 per cent.

"Why must we sacrifice our right?” he asked and said that members of the Special Committee also agreed that it is Sarawak state's right.

According to Abang Johari, in the Special Cabinet Committee meeting, five matters were proposed and the Sarawak government supports the proposal to amend the constitution on Article 1(2) on three regions in the formation of Malaysia.      

--BERNAMA