Sarawak govt con­fi­dent it can sus­tain in­vestor con­fi­dence it reg­u­lates its own O&G in­dus­try

pressreader.com

Sarawak govt con­fi­dent it can sus­tain in­vestor con­fi­dence it reg­u­lates its own O&G in­dus­try

• 4 Oct 2019
• +1 more
• Lim How Pim

KUCHING: The Sarawak gov­ern­ment is ready to take over the helm of its oil and gas in­dus­try in the state if Pu­tra­jaya thinks the im­po­si­tion of the state sales tax (SST) on the in­dus­try will hurt in­vestor in­ter­est and con­fi­dence, an as­sis­tant state min­is­ter said yes­ter­day.

As­sis­tant Min­is­ter in the Chief Min­is­ter’s Depart­ment Shar­i­fah Hasi­dah Say­eed Aman Ghaz­ali said Sarawak has in place the nec­es­sary laws to reg­u­late the in­dus­try if the fed­eral gov­ern­ment does not think it could con­tinue to do so.
“If the Fed­eral Gov­ern­ment feels it is un­able to sus­tain in­vestor in­ter­est and con­fi­dence in the oil and gas in­dus­try in Sarawak, be­cause in­dus­try play­ers, in­clud­ing Petronas, has to pay an­nu­ally RM3 bil­lion of SST, the Fed­eral Gov­ern­ment should con­sider se­ri­ously al­low­ing the State to reg­u­late fully the in­dus­try un­der its Oil Min­ing Or­di­nance and Dis­tri­bu­tion of Gas Or­di­nance.

“If the Fed­eral Gov­ern­ment feels it is un­able to sus­tain in­vestor in­ter­est and con­fi­dence in the oil and gas in­dus­try in Sarawak, be­cause in­dus­try play­ers, in­clud­ing Petronas, has to pay an­nu­ally RM3 bil­lion of SST, the Fed­eral Gov­ern­ment should con­sider se­ri­ously al­low­ing the State 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. This is am­ply demon­strated by the fact that for­eign oil com­pa­nies op­er­at­ing in Sarawak such as Shell, Mur­phy Oil, Per­tam­ina etc have paid the SST as­sessed up to date.
“Only Petronas has yet to pay,” said Shar­i­fah Hasi­dah, who is in charge of Law, State-Fed­eral Re­la­tions and Project Mon­i­tor­ing in a state­ment.
She made these re­marks in re­fut­ing an ar­ti­cle with head­line ‘Why the in­tro­duc­tion of the Pe­tro­leum Sales Tax in Sarawak may not ap­peal to Ev­ery­one’ pub­lished in the Malaysian Re­serve on Sept 30.

She made these re­marks in re­fut­ing an ar­ti­cle with head­line ‘Why the in­tro­duc­tion of the Pe­tro­leum Sales Tax in Sarawak may not ap­peal to Ev­ery­one’ pub­lished in the Malaysian Re­serve on Sept 30.
Shar­i­fah Hasi­dah said the ar­ti­cle con­tained a num­ber of in­ac­cu­rate state­ments re­lat­ing to Sarawak’s con­sti­tu­tional rights to levy SST on pe­tro­leum prod­ucts prin­ci­pally liq­ue­fied nat­u­ral gas (LNG), crude oil and con­den­sates.
“To be­gin with, the SST Or­di­nance 1998 was passed pur­suant to Ar­ti­cle 95B(3) of the Fed­eral Con­sti­tu­tion.
“The Ar­ti­cle reads ‘The Leg­is­la­ture of the State of Sabah and Sarawak may also make laws for im­pos­ing sales tax, and any sales tax im­posed by State law in the State of Sabah and Sarawak shall be deemed to be amongst the mater 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 in the Malaysian Re­serve,” she pointed out.

She said the right of Sarawak to pass laws on SST was in­cor­po­rated into the Fed­eral Con­sti­tu­tion pur­suant to the rec­om­men­da­tion in para 24(1) of Chap­ter III of the In­ter­Gov­ern­men­tal Com­mit­tee (IGC) Re­port which is an An­nex­ure to the Malaysia Agree­ment.
To ques­tion the state’s right to levy SST (which is a rev­enue as­signed to the state un­der Item 7 Part V of the Tenth Sched­ule of the Fed­eral Con­sti­tu­tion), ac­cord­ing to her, is there­fore a dis­guise to dis­hon­our the Malaysia Agree­ment and what is ex­pressly pro­vided in the supreme law of the na­tion as a source of rev­enue of Sarawak.
“The ex­er­cise of a right so clearly en­shrined in the Con­sti­tu­tion should not be de­pen­dent upon the out­come of the cur­rent dis­cus­sions on MA63 (Malaysia Agree­ment 1963) which should be fo­cused on mat­ters per­tain­ing to the ero­sion or recla­ma­tion of those rights which Sarawak is le­git­i­mately en­ti­tled to, un­der MA63.

“Why SST by State Gov­ern­ment? The Chief Min­is­ter has re­peat­edly ex­plained why SST needed to be im­posed. The State needed this ad­di­tional source to drive its de­vel­op­ment agenda.
“It 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 RM660 bil­lion, of which only five per cent or RM33 bil­lion was paid to Sarawak,” she said.
As such, Shar­i­fah Hasi­dah said Sarawak had con­trib­uted very sig­nif­i­cantly to fed­eral cof­fers from its rich oil and gas re­sources since 1976.
All the nat­u­ral gas de­rived from Sarawak were con­verted to LNG for ex­port to Ja­pan, Korea and Tai­wan, earn­ing very sig­nif­i­cant for­eign ex­change for the Malaysian gov­ern­ment, she stressed.
Hence, she said the im­po­si­tion of SST on pe­tro­leum prod­ucts ‘is a dis­charge of the State Gov­ern­ment’s fidu­ciary duty to Sarawakians to seek a fairer share of the rev­enues from oil and gas pro­duced in Sarawak’.

Hence, she said the im­po­si­tion of SST on pe­tro­leum prod­ucts ‘is a dis­charge of the State Gov­ern­ment’s fidu­ciary duty to Sarawakians to seek a fairer share of the rev­enues from oil and gas pro­duced in Sarawak’.
“Based on the present pro­duc­tion rate of oil and gas in Sarawak and at cur­rent global oil prices, the amount is RM40 bil­lion an­nu­ally. The SST will yield ap­prox­i­mately RM3 bil­lion ad­di­tional rev­enues for the State.
“A er all these years of con­tribut­ing bil­lions of ring­git to fed­eral Trea­sury from the State’s pe­tro­leum re­sources, what is the ba­sis for the Min­is­ter of Fi­nance Mr Lim Guan Eng to say ( as re­ported in Malaysian Re­serve) that the State’s im­po­si­tion of SST to yield ad­di­tional re­serve to the State of RM3 bil­lion is un­rea­son­able,” she said.
With re­gard to al­leged loss of in­vestor con­fi­dence in the oil and gas in­dus­try in Sarawak due to im­po­si­tion of SST, Shar­i­fah Hasi­dah said it must be pointed out that ‘ trade, com­merce and in­dus­try’ are mat­ters un­der the fed­eral port­fo­lio (Fed­eral List).

With re­gard to al­leged loss of in­vestor con­fi­dence in the oil and gas in­dus­try in Sarawak due to im­po­si­tion of SST, Shar­i­fah Hasi­dah said it must be pointed out that ‘ trade, com­merce and in­dus­try’ are mat­ters un­der the fed­eral port­fo­lio (Fed­eral List).

To ques­tion the state’s right to levy SST is a dis­guise to dis­hon­our the Malaysia Agree­ment. Shar­i­fah Hasi­dah Say­eed Aman Ghaz­ali

The Borneo Post

4 Oct 2019

My comments:

Take legal action to deal with them.  When Ah Gou or Ah Mao  refuses (阿狗或阿猫) to comply to the payment of SST, the prompt legal action is always taken to deal to make him pay immediately.  It is always so effective and correct.  What the Sarawak government should do now is the same treatment to deal with Petronas.  Every concerned Sarawakian is watching and judging.  Yes, time has set and prompt action to be taken to sue them in the court.  If it doesn't work,  just declare Sarawak independent unilaterally to get rid of the trouble of Malaya colonial power.