Why are mineral water companies not paying state royalties?

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Mineral Water Companies in Perak Must Pay State Royalties

Companies extracting underground mineral water in Perak are required to pay appropriate royalties to the state government. Perak Menteri Besar Datuk Seri Dr Zambry Abd Kadir stated that some companies have profited significantly without fulfilling this obligation, either by not paying royalties at all or by remitting insufficient amounts. The state views mineral and water resources as subject to laws and regulations that mandate fees for usage, with exceptions only for charitable, educational, or domestic needs.
State Government's Stance on Royalty Payment

The state government has made it clear that all entities involved in the extraction of underground mineral water must comply with royalty payment regulations. Datuk Seri Dr Zambry Abd Kadir emphasised that these resources are governed by specific laws and that usage incurs a fee, except for purposes deemed charitable, for schools, or for family consumption. This directive aims to ensure that the state benefits from the commercial exploitation of its natural resources.
Identified Non-Compliance by Companies

Concerns have been raised regarding certain companies that have achieved substantial profits from mineral water extraction but have failed to pay the requisite royalties. In some instances, the amounts paid have been deemed inappropriate, falling short of the expected contribution to the state. This situation has prompted the state government to address the issue directly, highlighting a gap in the expected revenue collection from this sector.
Preferred Approach to Resolving Non-Payment

While acknowledging the potential for legal action against companies that fail to pay royalties, the Menteri Besar indicated a preference for a more conciliatory approach. Datuk Seri Dr Zambry Abd Kadir suggested that negotiation would be the preferred method for resolving such disputes, rather than immediately resorting to legal proceedings. This approach aims to facilitate compliance and maintain constructive relationships with businesses operating within the state.
Warning Against Illegal Resource Usage

The state government has issued a warning against the illegal appropriation of state resources, including underground mineral water. Datuk Seri Dr Zambry Abd Kadir alluded to the possibility of significant enforcement crackdowns targeting those found to be using these resources unlawfully. This serves as a deterrent to prevent further instances of non-compliance and illegal extraction, reinforcing the importance of adherence to state regulations.

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Why are mineral water companies not paying state royalties?

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