Kota Kinabalu: The State Government will terminate the work permits for the operation of oil and gas companies that fail to pay their State Sales Tax (SST) on petroleum products owed to the State Government.
State Second Finance Minister Datuk Seri Masidi Manjun (pic) said the termination would take effect Oct. 1 if they still fail to do so.
It would apply to Hibiscus Petroleum Bhd’s wholly-owned subsidiaries namely, SEA Hibiscus Sdn Bhd (SEAH) and Repsol Oil and Gas Ltd (Repsol), which previously refused to pay the SST.
“The State Government has issued letters to the companies concerned (to inform them on this), should they still fail to pay,” he said during the question and answer session at the State Legislative Assembly (DUN) sitting on July 19.
He was responding to a supplementary question by Nominated Assemblyman Datuk Yong Teck Lee if action would be taken on SEAH and Repsol for their refusal to pay taxes. Masidi said an assessment notice was issued to the companies on June 21 to claim arrears and a penalty worth RM97.31 million, which is broken down to RMM65.6 million in sales tax and RM 31.66 million in penalty.
“It must be settled within 30 days from the date of the letter,” he said, adding that civil action would be taken should they fail to do so. Following the notice on June 24, the two companies asked for a one week grace to negotiate its arrears payment with Petroliam Nasional Bhd (Petronas).
Later on July 1, the State Government met with Petronas to discuss further actions to take on the two companies.
On July 8, the Government issued the termination notice of work permits to SEAH and Repsol should they fail to settle their arrears.
“The State Government has always ensured the collection of state revenue is not only robust but also optimised for contribution towards Sabah’s development and the people’s overall wellbeing.
“Therefore, the Government takes seriously not only on the collection of sales tax on petroleum products but on all types of products subject to the SST,” he said.
Masidi said the Government would not hesitate to take action through all constitutional and legal rights to obtain reimbursement of SST, due and outstanding, if any, in order to maintain the sovereignty of the State.
Meanwhile, the State Government collected RM808 million in SST on petroleum products as of June 30 this year.
Masidi said the amount was about 73 per cent of the total SST to be collected, estimated at RM1.1 billion.
“This brings the total sales tax collection on petroleum products since it was implemented on April 1, 2020 until June 30, 2022, to RM2.458 billion,” he said.
Additionally, Masidi said the State Government would impose SST on two more petroleum products effective Aug 1, namely ammonia and urea, which are estimated to contribute a total of RM46 million to State revenue this year.
He said this is part of the State Government’s effort to expand its resources and increase State revenue.
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