KUCHING: The Malaysian Reserve has been lambasted for stating that Sarawak’s move to levy State Sales Tax (SST) on the sale of petroleum products was obnoxious.
Assistant Minister in the Chief Minister’s Department (Law, State-Federal Relations and Project Monitoring) Sharifah Hasidah Sayeed Aman Ghazali said in a statement yesterday said that she could not see how the chief editor of Malaysian Reserve contended the move was impossible according to Article 96 whereas the State Sales Tax Ordinance 1998 was passed pursuant to Article 95B(3) of the Federal Constitution.
“This Article reads:(3) The Legislature of the State of Sabah or Sarawak may also make laws for imposing sales tax, and any sales tax imposed by State law in the State of Sabah or Sarawak shall be deemed to be amongst the matters enumerated in the State List and not in the Federal List.
“Therefore, the State Legislature’s constitutional authority to pass laws on SST is not dependent on Article 96 as contended by the Malaysian Reserve.
“The exercise of a right so clearly enshrined in the Constitution should not be dependent upon the outcome of the current discussions on MA 63 which should be focussed on matters pertaining to the erosion or reclamation of those rights which Sarawak is legitimately entitled to, under MA 63,” she said.
Explaining the move to levy SST was necessary, she said it was irrelevant to allege that imposition of the SST would result in loss of investor confidence in the oil and gas industry in Sarawak.
“The chief minister has repeatedly explained why SST is needed to be imposed. The state needs this additional source of revenue to drive its development agenda.
“lt must be pointed out that according to publicly available data, from 1976 to 2017, the total revenues derived from the production and sale of oil and gas within Sarawak territory amounted to RM550 billion, of which only 5 percent or RM33 billion was paid to Sarawak.
“With regard to alleged loss of investor confidence in the oil and gas industry in Sarawak due to imposition of SST, it must be pointed out that trade, commerce and industry are matters under the federal portfolio (Federal List),” she explained.
Sharifah Hasidah said if the federal government feels it is unable to sustain investor interest and confidence in the oil and gas industry in Sarawak, the federal government should consider seriously allowing the Sarawak to regulate fully the industry under its Oil Mining Ordinance and Distribution of Gas Ordinance.
“The state government is very confident that it is able to sustain investor confidence, whether short or long term, in the oil and gas industry in Sarawak,” she said, adding that of all foreign oil companies, Petronas was the only company that has yet to pay SST to date.
“This is amply demonstrated by the fact that foreign oil companies operating in Sarawak such as Shell, Murphy Oil, Pertamina and others have paid the SST assessed up to date. “Only Petronas has yet to pay,” she remarked.
