Malaysian national energy company Petronas will pay MYR1.25 billion ($302 million) in sales tax to the state of Sabah in 2021. According to Sabah Deputy Chief Minister Datuk Seri Dr Jeffrey Kitingan, Prime Minister Muhyiddin Yassin had approved the 5% sales tax that the eastern state will collect from Petronas. Previously, Petronas agreed to pay MYR2.96 billion ($716 million) in taxes to Sarawak after an unexpected settlement deal.
Malaysia’s eastern states of Sabah and Sarawak in Borneo island hold a large portion of the country’s oil and gas reserves. Both states have long asked for more payments from Petronas, the sole manager of Malaysia’s energy reserves. The requests, however, came as Petronas navigated a challenging market environment caused by the coronavirus pandemic. The company is also set to pay the federal government MYR34 billion ($8.22 billion) in dividend this year.
