Sabah hits dead end over 40% revenue entitlement request

THERE has been no progress on Sabah's request for its 40% revenue entitlement, despite formally making the demand since mid-2022.

Sabah Attorney-General Datuk Brendon Soh said state records show that Sabah formally made a written demand to the Finance Ministry in June 2022. This demand was based on Article 112C and Part IV of the Tenth Schedule, which states that Sabah is entitled to two-fifths (40%) of the revenue the Federal Government collects from Sabah.

“This was in anticipation of the negotiation process between the federal and state governments. As part of the interim arrangement agreed upon, critical financial data involving the actual revenue derived from the state was supposed to be disclosed.

“It has already been disclosed since 2022, and no less than eight official requests were made by the state to the federal government to obtain similar crucial financial data. Financial data was either not shared or was incomplete,” said Soh, adding that the state had always been professional and dedicated to pursuing its rights.

Soh noted that the non-disclosure was then brought to the Malaysia Agreement 1963 Implementation Action Council Technical Committee (Jtmtpma63) on 28 May this year, and the committee was informed that the state would present its calculation of the net revenue with whatever limited data it has obtained.

The essential data involves actual revenue obtained by the Federal Government from taxes, customs duties, fees, and fines, among others, referred to as “financial data.”

“In response, the Federal Finance Ministry informed the committee that the negotiations would be held separately between the parties in June 2024,” he said.

Soh noted that the state special grant review committee sent an official claim on 18 June in anticipation of the separate negotiations and a follow-up letter on 11 July 2024, despite the shortage of time and resources to meet the June deadline stated by the Finance Ministry.

“To date, there has not been a response in writing, despite the Finance Ministry confirming in Parliament on 16 July that Putrajaya was committed to discussing a new special grant rate for Sabah. We remain prepared, ready, and able to commence further negotiations for the special grant due,” he said.

Towards this end, Soh said both parties can apply Article 112D (6) of the Federal Constitution should the state and federal governments be unable to reach an agreement on any matter upon a fresh review of the special grant, which allows the matter to be referred to an independent assessor.

A decision on the 40% revenue entitlement was due on 18 July this year, marking the one-year deadline given to find a solution to the state's constitutional rights. However, Putrajaya has remained silent on the matter.

Upko President Datuk Ewon Benedick, a member of the Jtmtpma63, said that Sabah only submitted its proposal on 18 June, which is why there had been no solution to the state’s 40% entitlement by 18 July. According to him, the state’s proposal on the 40% solution was supposed to be discussed on 28 May.

“Sarawak submitted its proposal in February while Upko had also submitted its proposal to the Chief Minister (Datuk Seri Hajiji Noor) in January. Why couldn’t the state government do the same? I was hoping it would submit its proposal in February so that we could discuss it in the technical committee in May, but during the meeting, Sabah Deputy Chief Minister Datuk Seri Jeffrey Kitingan said that the state would only submit its proposal in June,” he said. – The Vibes, 27 July 2024.