MALAYSIA‘s state energy firm Petronas on Thursday paid over RM2.9 bil in sales tax to the energy-rich state of Sarawak, in a settlement that could open the way to more such payments to state governments.
The payment comes just two weeks after Petronas reported its first quarterly loss in nearly five years due to a coronavirus-related demand slump and lower oil prices.
Analysts and sources close to the company had said that a payment to Sarawak could encourage other energy-rich states in Malaysia to demand sales taxes annually, hurting Petronas’ finances.
Petronas, which is fully owned by the Malaysian government, had been fighting Sarawak state’s demand for the sales tax in court but the two parties agreed to unexpectedly settle earlier this year.
Petronas is a significant source of revenue for the federal government and a hit to its finances could also affect the annual dividend it pays to the government.
Petronas presented a cheque for RM2.96 bil to the Sarawak government, state news agency Bernama reported.
“The payment represents Petronas’ full and final settlement for the sales tax for the year 2019,” the company said in a statement.
The payment for this year will be made upon assessments by Sarawak authorities, it said. – Sept 18, 2020, Reuters
