Sarawak proposes special grant based on percentage of revenue generated

SARAWAK has proposed that the special grant allocated to the state under Article 112D of the Federal Constitution be determined based on a percentage of revenue generated by the state, said Sarawak Premier Tan Sri Abang Johari Tun Openg.

He said the state government intends to propose a new formula that ties the grant to Sarawak’s total income, particularly tax revenue, with a flexible mechanism that reflects the state’s current financial performance.

“We propose, for example, that 20 per cent of Sarawak’s revenue be returned to the state. If revenue is high, the amount returned will be higher; if revenue is low, the amount will be lower. The figure is flexible so that the federal government can consider it.

“At present, the allocation is insufficient. We build houses, bridges, cancer centres, and undertake various development projects using our own resources. However, as Sarawak now has its own revenue base, we are not 100 per cent dependent on others (federal),” he said as reported by Bernama.

Elaborating further, Abang Johari said a revenue-based approach would be fairer, as the state government is currently bearing the bulk of development costs through its own financial resources.

“At this time, Sarawak has revenue, so what is wrong with us contributing? At other times, if our revenue drops, the federal government can assist us. This is for the people...the people’s interests come first,” he said.

On Wednesday, the Ministry of Finance (MOF) announced that the federal government would hold negotiations with the Sarawak government this year to review the special grant under Article 112D, including formulating a new method for calculating the allocation.

In a written reply published on the Parliament website, the ministry said the negotiations would take into account the state’s needs in covering the cost of services, as well as the federal government’s financial position, in line with Article 112D of the Federal Constitution.

Article 112D stipulates that the amount of special grants for Sarawak and Sabah must be reviewed every five years. – February 13, 2026