KOTA KINABALU: The Sabah government must put in place policies to ensure non-Sabah based companies operating in the state provide their financial statements in efforts to get the state's 40% revenue return from the federal government.
Opposition Sabah Bersatu wanita chief Rahimah Majid said that such actions would help the state calculate the actual amount in federal taxes collected from the state, to calculate the 40% revenue due to be returned to the state under the Constitution.
She said that the Sabah government must take an assertive policy action on the major companies from the plantation, and oil and gas industries, among others, that paid federal taxes and make it compulsory to submit audited annual financial accounts.
Rahimah also said that all federal departments, agencies, and government-linked companies (GLCs) operating in Sabah must also declare their monthly and annual revenue collections.
“To ensure this policy carries legal weight, the Trade Licensing Ordinance must be amended to make the submission of audited financial reports a statutory requirement.
"Companies failing to comply should face strict penalties, including suspension of their trading licences and prohibition from operating in Sabah,” added Rahimah.
She said that the policy would empower the state government to independently track and verify actual revenue collection — reducing reliance on federal data and eliminating the risk of manipulation or underreporting, particularly concerning the longstanding issue of the 40% net revenue entitlement still owed to Sabah.
Rahimah said this in response to the disclosure by state Assistant Finance Minister Datuk Julita Mojungki, that 13 formal requests to the federal government for data on revenue collected from Sabah had yet to see any response.
Rahimah said the Federal Government’s inaction undermines Sabah’s right to validate its fair revenue share — estimated to be worth billions annually — under the Malaysia Agreement 1963 (MA63) and Article 112C of the Federal Constitution.
“It is time for the Sabah Government to take firm, proactive steps to safeguard the State’s financial rights. Knowing exactly how much the Federal Government earns from Sabah — and recovering the 40% net revenue that is due — will enable the state to implement long-overdue development projects and improve the wellbeing of all Sabahans,” she added.
Rahimah also proposed the creation of a Joint Audit Committee with the inclusion of an independent third-party auditor to ensure transparency in auditing federal revenue collections originating from Sabah.
“An independent audit would provide verified data on production volumes, profits, and tax payments—allowing the State to accurately assess whether it is receiving its rightful 40% revenue share under MA63 and the Constitution,” she added.
