Analyst tells Sarawak, Petronas to go for progressive tax

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Petronas and the Sarawak government recently announced their decision to resolve a tussle over the state’s oil and gas assets.PETALING JAYA: An oil and gas analyst has proposed that Sarawak levy a form of progressive sales tax on Petronas instead of fixing the rate at a flat 5%. Renato Lima de Olivera, an assistant professor at the Asia School of Business, said this would ensure that the state remain attractive for new investments in exploration and production of petroleum. “If taxes are deemed too high and regressive, then there is no incentive to invest in finding and developing new oil and gas fields,” he said. “A progressive tax structure will mitigate this. “Otherwise, what you will see is higher taxes from current fields, but these fields will eventually deplete by the natural extraction process.” A progressive tax structure would essentially see the tax rate increase or dec…