THE first round of negotiations between the Federal Government and the Sabah State Government over the 40 percent net revenue entitlement will be held at Menara Kinabalu on Monday.
Minister of Domestic Trade and Cost of Living Datuk Armizan Mohd Ali said the discussions would be conducted at the official level, led by Chief Secretary to the Treasury Datuk Johan Mahmood Merican on behalf of the Federal Government.
“For the Sabah Government, it will be represented by the State Secretary, Datuk Seri Safar Untong, given that Sabah is currently under a caretaker administration,” he said during a weekly post-Cabinet press conference on Friday.
The talks follow the Federal Government’s decision last Tuesday not to appeal the special grant to Sabah based on the 40 percent entitlement, as affirmed by the Sabah Law Society’s judicial review against the Malaysian Government.
The Attorney General’s Chambers clarified that the government only intends to appeal certain aspects of the High Court’s reasoning, rather than the 40 percent entitlement itself.
The Kota Kinabalu High Court ruled on 17 October that the Federal Government is obliged to review and reimburse Sabah’s 40 percent net revenue entitlement under Articles 112C and 112D of the Federal Constitution.
The court ordered the government to complete the review within 90 days and reach an agreement on payment within 180 days of the order.
The High Court also invalidated parts of three Federal Gazettes issued on 20 April 2022, 24 December 2023, and 27 August 2025, finding them inconsistent with the constitutional position regarding Sabah’s special grant.
In related developments, Government Spokesperson Datuk Fahmi Fadzil confirmed that Cabinet had agreed on Armizan’s role as Sabah’s representative in the discussions.
On the matter of Ewon, who submitted his resignation as Minister of Entrepreneur and Cooperative Development, Fahmi stated that the minister is currently on leave.
“You may refer to the Prime Minister’s Office for details; I do not have the exact number of days he is on leave,” he said. Ewon, who is also UPKO president, resigned from Cabinet last Monday following disagreements with the AGC over Sabah’s 40 percent federal revenue entitlement. - November 14, 2025
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