AVAILABILITY of data on revenue sources by the Federal Government from Sabah is the remaining obstacle to determining the state’s 40% revenue entitlement, said Sabah Finance Minister Datuk Seri Masidi Manjun.
He said while there was no issue getting the revenue collected from the Inland Revenue Board, the problem in getting the numbers lies with other federal collection agencies.
“We have a (Sabah) representative in the Inland Revenue Board. But Income tax is only one source of revenue. There are many others.
“I don’t think it's public record,” he told reporters after attending his ministry’s appreciation night in Kota Kinabalu, yesterday.
Masidi said this when responding to the proposed repayment formula proposed by Upko president Datuk Ewon Benedick to the Sabah government.
In a brief response to Benedick’s proposal, Masidi said the formula has already been legislated.
Aside from income tax, Putrajaya also sources revenue from the state through customs, levies, road tax, and interest on state loans.
Peninsula-based companies that have set up bases in Sabah and paid taxes to the Federal Government are also questionable as a source of revenue from the state.
Article 112C and Section 2(1) of Part IV of the 10the Schedule provides that 40% of the revenue collected by the Federal Government from Sabah must be returned to the state as a special grant.
The special provision was part of the deal stipulated in the Malaysia Agreement 1963 for Sabah to formally merge with Malaya to form Malaysia in 1963, with Sarawak as the only state that enjoys similar privileges.
In 1974, the Federal Government decided to give Sabah a fixed amount of revenues, rendering the move unconstitutional.
There has been no review of the special grant since 1969 despite it being constitutionally mandatory.
It could not be ascertained whether the Sabah government has been furnished with all the revenue collected from Sabah from 1974 until date.
The matter had also been a pertinent matter for judicial review brought by the Sabah Law Society which the body had termed as the “lost years.” - The Vibes, January 13, 2024
