KOTA KINABALU: The State authorities has issued a stern warning to two wholly owned subsidiaries of an oil and gas firm working in Sabah that they’re legally obliged to pay them state sales tax (SST).
This is after the refusal by Repsol Oil & Gas Ltd (Repsol) and SEA Hibiscus Sdn Bhd (SEAH), each wholly-owned by Hibiscus Petroleum Berhad, to make the cost.
Sabah Finance Minister II Datuk Seri Masidi Manjun mentioned the state authorities “stays totally dedicated in pursuing all its constitutional and legislative rights to get better the SST due for the sale of petroleum merchandise” from each Repsol and SEAH in accordance with the State Sales Tax Enactment 1988.
For the document, Repsol and SEAH had utilized to the Finance Ministry and had been subsequently issued with the requisite licence as a “taxable individual” pursuant to the State Sales Tax Regulations 1999.
“The state authorities due to this fact categorically refutes the alleged foundation upon which Repsol and SEAH are refusing to make cost of the SST and has already demanded cost of the identical,” he mentioned in a press release on Friday (June 10).
Masidi famous that there had been with out prejudice discussions between the representatives of the events in relation to the difficulty.
“However, the matter has now reached an deadlock and each companies stay liable and have a seamless obligation to make cost for the excellent quantities of SST, together with penalties.
“The state authorities reserves its proper to take any action deemed crucial throughout the powers, authority and jurisdiction of the state,” he mentioned.
The Edge Markets on June 7 reported that Repsol had stopped paying the SST after the Sabah Finance Ministry didn’t reply to its enchantment against the tax enforcement.
Hibiscus mentioned Repsol, which has a production-sharing contract (PSC) within the Kinabalu Oil Field, had been paying the SST “beneath protest” since 2020.
In a bunch submitting, the group mentioned SEAH, which is the holder and operator of the 2011 North Sabah Enhanced Oil Recovery PSC, had not made any SST cost to the state in any respect.
Hibiscus mentioned Repsol had contested in Sept 2020 that it offered its crude oil entitlement from the Kinabalu Oil Field on the Labuan Crude Oil Terminal (LCOT) facility “outdoors the sovereignty and jurisdiction of the state of Sabah” and therefore shouldn’t be charged the SST.
As Repsol didn’t obtain any reply to its enchantment for 20 months since then, Hibiscus mentioned its board had resolved to discontinue the cost of SST, commencing from the lifting of crude oil undertaken on May 24.
The Sales Tax (Rates of Tax) Order 2018 on petroleum merchandise, particularly crude petroleum oil and pure gas/liquefied gas, was gazetted on Dec 6, 2018 and got here into pressure on April 1, 2020.
