KOTA KINABALU – Oil and gas companies refusing to pay the Sabah sales tax (SST) will have all workers’ permits cancelled by October 1 if they fail to settle their dues by then, said Sabah Finance Minister II Datuk Seri Masidi Manjun.
He said this comes following a series of actions taken by the state government after issuing the notices to Repsol Oil and Gas Ltd and SEA Hibiscus Sdn Bhd – the companies owned by Hibiscus Petroleum Bhd, which had defaulted on tax payments.
On June 8, Hibiscus Petroleum announced that its subsidiary Repsol has discontinued payment of the SST, while another subsidiary SEA Hibiscus has not been paying the SST to the state at all.
In answering a question in the state assembly today, Masidi noted that the state sales director issued a tax assessment letter on June 21 on the overdue amount, which he revealed has now run up to RM97.31 million.
“RM65.6 million for taxes and RM31.66 million for penalties – and the instruction says dues must be paid in 30 days after the assessment was issued.
“The letter also indicates a civil action will be taken against them if they fail to pay their dues,” said Masidi in his response to the question posed by appointed assemblyman Datuk Seri Yong Teck Lee.
Masidi also stated that the state has issued a letter demanding payments for the SST on June 8 and a follow-up letter rejecting Repsol’s appeal against paying the tax on June 14.
“A meeting was held on June 22 between Petronas, the state government and the companies in question on settling the dues and penalties.
“The companies have requested a one-week grace period to discuss with the national oil company and will inform on their decision on the stipulated time frame,” he said.
Masidi said a meeting was held on July 1 with Petronas on the next course of action. On July 8, the state issued a letter informing companies that their work passes will be cancelled if they fail to settle its dues by October 1.
Earlier, Masidi who is also the local government minister said under the State Sales Tax Enactment 1998, Sabah can fine any parties failing to pay the taxes and also impose a 10% penalty upon default in payments.
The state sales tax director also has the power to revoke the sales tax licence of any parties and this can cause the firms to cease operations, he said.
“The state sales director could also file a request letter to the Immigration director-general to deny any parties involved from leaving Malaysia,” he said.
On June 10, Masidi told The Vibes that Sabah will pursue the SST from the companies but did not reveal the plan of action.
As of June 30, the state has collected RM809 million in SST, adding that Sabah is estimated to collect up to RM1.1 billion in taxes this year. – The Vibes, July 19, 2022
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