Can Sabah regain its full 40pc net revenue entitlement?

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Sabah's Claim for 40 Per Cent Net Revenue Entitlement Remains Active

Sabah's pursuit of its 40 per cent net revenue entitlement from the federal government is ongoing, with an interim payment arrangement in place not hindering the state's long-term claims. The state government is optimistic about achieving a consensus with the current federal administration, led by Prime Minister Datuk Seri Anwar Ibrahim, to address this matter seriously. This persistent claim is rooted in the provisions of the federal constitution and the Malaysia Agreement 1963 (MA63).
Interim Grant Agreement Does Not Preclude Full Claim

An interim special grant of RM125.6 million was agreed upon in April, a figure acknowledged by Sabah Chief Minister Datuk Seri Hajiji Noor as being significantly lower than what the state is constitutionally entitled to. However, accepting this interim payment until 2026 is considered a strategic move to avoid halting development plans, such as affordable housing projects under the Sabah Maju Jaya initiative. Crucially, this arrangement has been accepted without prejudice, ensuring it does not diminish Sabah's ongoing claims for the full 40 per cent net revenue.
Demand for Backdated Payments to Be Pursued

Sabah intends to pursue backdated payments for the 40 per cent net revenue, as no comprehensive reviews or adjustments have been made since 1973. This historical lack of revision underscores the state's position that it has been undercompensated for decades. The Chief Minister expressed confidence in the federal government's willingness to engage in negotiations under the new "unity government," signalling a potential for progress on this long-standing issue.
Commitment to MA63 Principles Underpins Negotiations

The Sabah state assembly has formally voiced its stance to continue advocating for the reinstatement of the 40 per cent revenue return as stipulated in the MA63. Chief Minister Hajiji Noor has personally raised this demand with Prime Minister Anwar Ibrahim, who has reportedly agreed to consider Sabah's requests with seriousness. This indicates a commitment from the highest levels of government to engage with the state's demands concerning MA63.
Previous Joint Statement Acknowledged Need for New Formula

A joint statement issued in April by Sabah and the then federal government acknowledged the RM125.6 million payment as an interim measure while new calculations and a revised formula were being determined. This statement also indicated that any newly established formula would be applied retroactively, backdated to 2022. This prior agreement provides a basis for further discussions on how the state's full entitlement will be calculated and implemented moving forward.

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Can Sabah regain its full 40pc net revenue entitlement?

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