Hibiscus Petroleum pays up RM85.7mil state sales tax owed to Sabah

KOTA KINABALU: Hibiscus Petroleum Berhad, who refused to pay the State Sales Tax (SST) for petroleum products as it was operating out of Labuan Federal Territory, has paid up RM85.7mil in arrears.

"They have paid us," Sabah Finance Minister II Datuk Seri Masidi Manjun (pic) said when contacted.

The company had apparently ended the stand-off with the state government in an effort to end uncertainty over its Sabah operations - North Sabah and Kinabalu fields.

The company in refusing to pay said that they were not subject to Sabah state sales tax as it was selling its crude oil at the Labuan Crude Oil Terminal (LCOT) which was outside the jurisdiction and sovereignty of Sabah.

However, Sabah government gave them till Oct 1, this year to pay up the SST failing which they would terminate the work permits of their offshore workers in the state.

The company is expected to continue paying the SST due to Sabah from its operations in the state.

It is estimated Sabah would earn about RM40mil in SST payments through Hibiscus operations in Sabah annually.

Sabah imposed state sales tax on petroleum products from April 2020 after the state gazetted it in Dec 2018.