Khairy: Oil royalty hike affects tax collection, Petronas profits

Dateline 2012-10-01:

Demands for increased royalty to be paid to oil-producing states will cause both a drop in tax collections and profits for government-owned firm Petronas, Umno lawmaker Khairy Jamaluddin said today.

“We understand demands from states such as Kelantan but we have to think of the financial implications when we talk about increasing royalty,” the Rembau MP said in Parliament.

The Barisan Nasional (BN) and Umno Youth chief said it was “not so easy” as the tax collection from such states will be affected.

He also said that increasing the oil royalty will cause a drop in Petronas’s returns.

Dividends from the state oil firm currently account for over 40 per cent of the federal government’s revenue.

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