SARAWAK’S 5%  sales tax on petroleum products is “too little” and is short changing the people, said state rights activist Lina Soo said.

Soo, who is president of Sarawak People’s Aspiration Party (Aspirasi), said as the landowner where oil and gas are extracted, Sarawak should impose a rate of 25%, particularly on Petronas.

If Petronas feels the 25% is untenable, then the national oil company should reduce the amount of Petroleum Income Tax (Pita) it pays to the federal government from the current 38% to 5%.

“Sarawak is the landowner and has ownership and economic rights over all our resources. This is enshrined in the Malaysia Agreement 1963 (MA63), the Sarawak and federal constitutions.

“Despite Sarawak being the most resource-rich nation in the federation, our people are the poorest with highest incidence of poverty.

“All the profits from our oil and gas had been siphoned off to Malaya to feed the development (there) and also to fund the corruption in Malaysia,” she said.

Batu Lintang assemblyman See Chee How agreed with Soo that the 38% Pita payment made the federal government the biggest beneficiary and recipient of Sarawak petroleum proceeds.

“Sarawak is grievously prejudiced by such unfair and inequitable distribution of the Sarawak petroleum proceeds considering the fact that our petroleum resources are depleting.

“It is, therefore, imperative for the state to regain legal ownership of our petroleum resources to fully protect our petroleum and other natural resources found within the territory of Sarawak to ensure its sustainability for the benefits of our future generations,” the former PKR lawmaker, who has since joined rival Party Sarawak Bersatu (PSB), said.

He said the RM2.9 billion in state sales tax Petronas has paid to Sarawak for last year’s assessment showed that the revenue the national oil company made in Sarawak last year was a “massive” RM59.1 billion.

He said if the sales made by the other petroleum companies operating in the state are added, revenue from petroleum and petroleum products would have been in excess of RM61 billion.

“For the first time, it has come to public knowledge that the national oil company and its network of contractors and subcontractors had acquired from Sarawak six times our annual state budget.” 

Soo is now demanding the state government make public why Petronas was only made to pay 5% and why the state government is not seeking to declare Petroleum Development Act (PDA) 1974 unconstitutional and not applicable to Sarawak.

She said Sarawak’s sovereignty over its oil and gas resources “cannot be compromised”.

The PDA gives Petronas monopoly over all petroleum and gas resources in the country. 

Sarawak however, has declared the PDA inapplicable in the state as its Oil Mining Ordinance (OMO) is the law that gives the state absolute control of all hydrocarbon resources found in Sarawak. – September 18, 2020.