Sabah's 40pct revenue: Govt to decide next action after AG's advice

PARLIAMENT | Putrajaya will decide whether to appeal the Kota Kinabalu High Court's ruling on Sabah’s 40 percent share of federal revenue after obtaining the advice of the attorney-general, said Anwar Ibrahim.

During a special briefing session at the Dewan Rakyat, the prime minister told the house that any decision would be in the best interests of all.

"The Madani government respects the legal process and will examine the Kota Kinabalu High Court's grounds of judgment after we receive it... so far we have yet to receive (the document), before taking any further action under the advice of the attorney-general for the interests and well-being of Sabah and Malaysia as a whole," Anwar said.

The special briefing session was called today following the court's decision on Friday, where it found the federal government had acted unlawfully and beyond its powers under the Federal Constitution by failing to honour Sabah’s 40 percent share of federal revenue for nearly five decades.

Anwar said he called for the briefing to clarify "misleading interpretations" of the court ruling, "as if the federal government merely extracts revenue from Sabah without contributing to its development."

READ MORE: KINIGUIDE | What High Court's 40pct revenue ruling means for Sabah

More spent than collected

Stressing Putrajaya's commitment to addressing all demands from Sabah and Sarawak under the Malaysia Agreement 1963 (MA63), the prime minister said they had allocated more funds to Sabah than what the federal government collected from the state since 2022.

According to him, the federal government has channelled an increasing amount of funding to Sabah from RM13 billion in 2022, RM14 billion in 2023 and 2024, and RM17 billion for this year and the next, as opposed to around RM10 billion in revenue it collected from the state every year.

The allocations included the federal government's special grant to the state, federal agencies' expenses, fuel subsidies and Sabah development expenses.

"In reality, this expenditure far exceeds the amount of revenue collected in Sabah for the years 2022, 2023, and 2024, which was around RM10 billion per year.

"This revenue includes the five percent petroleum cash payment as well as other direct and indirect taxes. This means that the Madani government has spent more than the total revenue collected in Sabah," Anwar added.

Special grant increase

On the special grant to Sabah, the prime minister pointed out that his administration had increased the amount several-fold since it took over Putrajaya.

This followed a review carried out in 2022 and an agreement reached between Putrajaya and the Sabah state government then, which saw the special grant increased from RM53.4 million a year to RM125.6 million.

After a review exercise in 2023, the amount was increased to RM300 million before it was doubled to RM600 million this year, Anwar said.

However, the prime minister stressed that the increase to RM600 million was also an interim amount, pending a discussion between Putrajaya and the Sabah government on a new mechanism to determine future calculations for the special grant.

Reporting by Hariz Mohd, Qistina Nadia Dzulqarnain, Dania Kamal Aryf, Shakira Buang

PM to brief Parliament on Sabah special grant

Upko defends Ewon's stance on 40pct ruling, rebukes MP's 'ransom' remark

Don't hold federal govt to ransom over 40pct case - Hassan

Kitingan formulating new GBS pact to take on GRS

Respect 40pct revenue verdict, Sabah leaders urge Putrajaya