SABAH’s proposal to resolve its 40% revenue entitlement claim will be brought before the Malaysia Agreement 1963 (MA63) Implementation Action Council for deliberation on September 12, said Deputy Prime Minister Datuk Seri Fadillah Yusof.
The proposal, submitted during a special technical meeting between federal and state representatives on Monday, saw Sabah requesting Putrajaya to begin implementing the entitlement by fulfilling non-disputed revenue items, such as tax receipts, while discussions on the broader formula continue.
The interim measure was put forward by Sabah to move forward without prejudice to the state’s full claim under Articles 112C and 112D of the Federal Constitution.
“This is a technical committee, not the deciding body. What Sabah proposed, along with responses from the Ministry of Finance and the Attorney General’s Chambers, will be brought to the MA63 Council chaired by the Prime Minister next month,” said Fadillah, who also chairs the technical committee.
Fadillah was met after chairing the technical committee in Kota Kinabalu today.
He said the council’s decision would determine whether an interim arrangement could be adopted while negotiations on the full quantum are ongoing.
However, he also warned that any resolution must account for legal constraints, including ongoing court proceedings.
“From a legal standpoint, there are issues that prevent us from making a resolution without a court decision,” he said, referring to the judicial review filed by the Sabah Law Society (SLS) in 2022.
“What we’re looking for is a settlement outside the judicial process — but we cannot ignore that the case is still active,” he said.
The SLS case challenges the federal government’s move to fix Sabah’s special grant at RM125.6 million without proper consultation or a constitutional review, as required every five years under Article 112D.
Fadillah acknowledged that the state’s entitlement is not in dispute and reiterated that “the MA63 Council will decide whether the solution will be interim or otherwise.”
He said the next council meeting, scheduled for September 12 in Kuala Lumpur, would consider all proposals including those from Sabah and responses from federal authorities.
Deputy Chief Minister Datuk Seri Dr Jeffrey Kitingan, who represented Sabah at the meeting, said the state was prepared to accept an incremental solution in the meantime, so long as it did not compromise Sabah’s wider constitutional rights.
“While we wait for the main resolution, we can have a temporary one, without affecting the ultimate solution.
“We asked that what is clear and has been agreed by both federal and state levels be implemented, that the 40% can apply to non-disputed items, such as tax revenue,” Jeffrey said.
The meeting, held in Kuala Lumpur, focused solely on Sabah and did not involve Sarawak, as the agenda was limited to constitutional provisions under Articles 112C and 112D specific to Sabah.
“This is a special technical meeting — for Sabah only. It does not involve Sarawak this time,” said Fadillah.
He confirmed that further technical-level discussions involving both Sabah and Sarawak would resume after the September meeting, depending on the outcome of the Prime Minister-led council’s decision.
The meeting concluded without a firm resolution, but with expectations that the next round of deliberations could yield a phased approach, one that recognises constitutional rights while navigating both legal and political constraints.
The meeting on Monday was supposed to be held on June 30 but was delayed to July 14 after Fadillah requested a postponement.
The said meeting was initially touted to be a make-or-break decision on the 40% entitlement, but falls short as merely as a proposal meeting. – July 14, 2025
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