KUALA LUMPUR: The 40% net revenue payment owed to Sabah is stipulated in the Federal Constitution, unlike claims arising from other states in Peninsular Malaysia, said Parti Warisan President Datuk Seri Mohd Shafie Apdal (pic).
His statement follows a recent announcement by Prime Minister Datuk Seri Anwar Ibrahim regarding the RM16bil federal allocation to Sabah, which has been criticised for not addressing the state's 40% constitutional entitlement under the Malaysia Agreement 1963 (MA63).
Shafie emphasised that the 40% claim was under the Federal Constitution, a unique agreement not present for other states in Peninsular Malaysia.
He made these remarks during a party event in Pulau Sebatik on Saturday (June 1), responding to Anwar’s speech when closing the state-level Kaamatan festival on Friday (May 31).
Anwar had stated that in claiming the 40%, Sabah must also consider the needs and feelings of other states in Peninsular Malaysia, such as Penang, which suggested that Putrajaya allocate at least 20% of the overall taxes collected in the state.
Penang Chief Minister Chow Kon Yeow had recently requested a review of the Federal Government’s allocation system to fund various programmes and projects for state development.
Shafie argued that both scenarios are different and that the MA63 agreement, signed with the British and (the late) Queen Elizabeth II, was a unique arrangement prior to the formation of the Federation of Malaysia.
"This 40% issue has been bothering the people of Sabah and has been a source of discontent since 1974 when it was last reviewed," Shafie said, believing that Sabah’s claims and rights can be resolved with deeper deliberation and consideration.
Lawyer Datuk Roger Chin has also taken issue with Anwar’s statement regarding the RM16bil federal allocation, arguing it does not address Sabah's 40% net revenue entitlement. Chin, the immediate past president of the Sabah Law Society (SLS), said that while the increased allocation may appear generous, it skirts the core issue.
"Instead, it seems to obfuscate the real financial needs and rights of the state, thereby insulting the intelligence of the people of Sabah," he said.
"The Prime Minister's assertion that the RM16bil allocation exceeds the 40% net revenue entitlement is misleading and dismisses the underlying issue. The allocation is not a substitute for the special grant; it is a separate financial arrangement with different implications."
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Chin noted that federal allocations and special grants are distinct, pointing out that the RM16bil allocation was earmarked for specific operational expenditures within Sabah.
These funds are designated for various programmes and projects, with the unutilised balance rolled over to the next fiscal year, meaning they do not flow directly into the state's coffers. In contrast, the 40% net revenue entitlement under MA63 is a special grant that should be directly transferred to the Sabah state government to be used at the state's discretion.
As for Anwar’s call to end "parochial and narrow-minded sentiments" related to state rights, Chin said such statements trivialise the genuine concerns of Sabahans regarding their financial entitlements and self-governance.
"Dismissing these concerns as mere noise undermines the legitimacy of Sabah's aspirations and the historical agreements that form the basis of Malaysia's federation. The people of Sabah deserve transparency, respect for historical agreements, and genuine financial empowerment. Anything less is an affront to their intelligence and their rightful place within the Malaysian federation," he said.
The Court of Appeal will deliver its ruling on June 18 regarding an appeal by the Federal Attorney General to challenge the Kota Kinabalu High Court's decision to grant leave to SLS for a judicial review concerning Sabah's constitutional 40% revenue entitlement.
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