Sabah: No independent assessor till 40% revenue dispute resolved

SABAH will not be invoking its right to engage an independent assessor to address revenue entitlement.

Deputy Chief Minister I, Datuk Seri Jeffrey Kitingan, said the state government is not considering the option under Article 112D (6) of the Federal Constitution because negotiations are still ongoing.

“At this stage, no, because we are still in the process of resolving the issue. Until then, we do not want to engage an assessor as we have not reached that point yet,” Jeffrey said when met in Kota Kinabalu.

Prime Minister Datuk Seri Anwar Ibrahim is expected to announce a special grant of RM600 million for Sabah during the tabling of the 2025 budget in Parliament next month.

This revised grant, which falls under Article 112D, is double the amount Sabah received this year, as Deputy Prime Minister Datuk Seri Fadillah Yusof announced.

The RM600 million grant is an interim measure until a permanent solution is reached regarding Sabah’s 40% net revenue entitlement, as stipulated in Article 112C and Part IV of the Tenth Schedule of the Federal Constitution.

Sabah has opted for an off-the-books interim payment instead of a constitutional five-year review process to set a new amount for the special grant.  

Sabah Chief Minister Datuk Seri Hajiji Noor has reportedly welcomed the increased grant.

However, he emphasised that this is a temporary solution pending the resolution of the 40% entitlement issue.

This comes as the Sabah government has reiterated that it has not waived its right to the revenue and was prepared to invoke the assessor clause in the Federal Constitution if a consensus cannot be reached between both parties.

Putrajaya has collected RM10.2 billion from Sabah in 2023 through four revenue sources: taxes, customs excise, the Inland Revenue Board, and petroleum cash payments.

Sabah has sought the amount Putrajaya collected from the state but was denied parts of the data.

The state had been forced to devise its calculation to be presented to the MA63 implementation committee to assert its revenue claim.  

However at the recent Malaysia Agreement 1963 (MA63) implementation meeting held in Kota Kinabalu on September 12, the 40% revenue entitlement concluded without any progress.

Instead, the MA63 Implementation Committee has distanced itself from the matter, citing concerns of sub-judice due to an ongoing court case.

The Sabah Law Society has filed a legal review of the 40% revenue entitlement in the High Court. – September 24, 2024