KUCHING (Dec 3): A commercial settlement agreement will be signed next Monday (Dec 7) between Sarawak and Petronas after both parties agreed to the terms related to the imposition of the State Sales Tax (SST) and the state’s decision to regulate oil mining in Sarawak.
According to the State Consultative Committee chairman Datuk Amar Mohamad Asfia Awang Nassar today, the details of the commercial settlement would be revealed after the agreement has been formally signed.
“The commercial settlement would be signed on Dec 7, 2020. The state government will be represented by the State Secretary Datuk Amar Jaul Samion while Petronas would be represented by its chairman (Datuk Ahmad Nizam Salleh).
“The details of the commercial settlement agreement will be released after the agreement is formally signed.
“The historical signing ceremony to be held in Kuala Lumpur, and to be witnessed by Chief Minister Datuk Patinggi Abang Johari Tun Openg and Prime Minister Tan Sri Muhyiddin Yassin, together with the whole negotiation team from both the Sarawak government and Petronas,” said Asfia in a statement.
He said the State Consultative Committee was briefed on the commercial settlement agreement during a meeting at the State Legislative Assembly (DUN) Complex here this morning.
He said the briefing was conducted by representatives of the state government involved in the negotiations with the national oil company Petronas.
“After extensive discussions between the Sarawak government, Finance Ministry and Petronas, the state government and Petronas have agreed to the terms of the commercial settlement.
“The State Consultative Committee at its meeting today was informed of the scope, and salient features and terms of the commercial settlement and the significant benefits and advantages which the state would derive from the agreement,” said Asfia.
Petronas filed a judicial review late last year after Sarawak started imposing five per cent SST in Jan 2019 on its petroleum products.
Petronas argued that the SST opposed by Sarawak was invalid because the matters under the Federal List and could not be double-taxed. On top of that, the national oil company is already paying tax to Putrajaya in the form of petroleum income tax.
Furthermore, Petronas argued that the SST also appeared to overlap with the Petroleum Development Act (PDA) 1974, which stated that Petronas is the regulator of all oil and gas assets in the country.
Since Petronas had not been paying the SST, Sarawak filed a RM1.3 billion civil suit against the national oil company.
In May 2020, the federal government, state government and Petronas have agreed that the issues relating to the imposition of the SST and the state’s decision to regulate oil mining in Sarawak under state laws should be resolved without going through legal process.
Following that, legal actions commenced by Petronas and the state government were withdrawn in August this year.
“The federal government formed a joint committee headed by Senior Minister for Works Datuk Seri Fadillah Yusof and the Minister of Finance Tengku Datuk Seri Zafrul Abdul Aziz to facilitate the discussions between the state government and Petronas,” said Asfia.
The State Consultative Committee whom he chaired consists of Minister of Tourism, Arts, Culture, Youth and Sports Datuk Abdul Karim Rahman Hamzah, Assistant Minister of Law, State-Federal Relations and Project Monitoring Datuk Sharifah Hasidah Sayeed Aman Ghazali, DUN Deputy Speaker Dato Gerawat Gala, Assistant Minister of Youth and Sports Datuk Snowdan Lawan, Assistant Minister of Corporate Affairs Abdullah Saidol, Piasau assemblyman Datuk Sebastian Ting, Muara Tuang assemblyman Datuk Idris Buang, Tasik Biru assemblyman Dato Henry Harry Jinep, Bawang Assan assemblyman Dato Sri Wong Soon Koh, Bukit Assek assemblywoman Irene Chang, Tanjong Batu assemblyman Chiew Chiu Sing and Krian assemblyman Ali Biju.
Batu Lintang assemblyman See Chee How resigned from the Consultative Committee in July this year.
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