SABAH will only issue a letter of claim to Putrajaya over the state’s rightful 40% revenue entitlement after data on all the revenue sources are made available to the Sabah government, said state Finance Minister Datuk Seri Masidi Manjun.
He said that a technical committee under the Malaysia Agreement 1963 (MA63) council has been formed specifically for getting the date and details on the amount of revenue the federal government has obtained from Sabah.
“We can only establish a baseline for calculating the 40% share owed to the state by the federal government after obtaining these data,” he said. He was responding to Upko president Datuk Ewon Benedick’s call for the state to issue a formal letter of demand for Sabah’s 40% revenue entitlement yesterday.
Masidi said the state had already issued a formal letter of claim on the 40% on June 10, 2022, and this resulted in the interim payments in lieu of the state rights.
However, he emphasised that the interim payments should not be taken as a settlement to the matter.
Under Article 112C of the federal constitution and Part IV of the Tenth Schedule of the constitution, Sabah is entitled to two-fifths or 40% of the revenue the federal government collects in Sabah. Meanwhile, Article 112D of the federal constitution allows for the state and the federal government to review the entitlement every five years.
But from 1974 onwards, the federal government had defaulted on the state’s 40% revenue entitlement, opting for a fixed payment until present. Data on the collection became no longer available to the state.
Masidi said there is a need for comprehensive data from relevant federal agencies to calculate the precise figures, stating that this issue is hindering negotiations and efforts when the data is not available to the state.
Commenting on the July deadline set to decide on the framework on the payment of the 40%, Masidi said the state has other options should the matter not be resolved.
Article 112D (6) of the federal constitution provides that the matter can be referred to an independent assessor if both parties are unable to reach an agreement on the special grant.
However, Masidi stressed that both the federal and state governments are part of the same administration, and expressed optimism that the July timeline could be met. – The Vibes, January 24, 2024
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