Thursday, 23 October 2025
When Prime Minister Datuk Seri Anwar Ibrahim claimed that the Kota Kinabalu High Court’s ruling on Sabah’s 40% revenue entitlement “invites misleading interpretations,” he ignored one critical truth — that this is not a matter of perception or generosity.
It is a constitutional right, guaranteed under Articles 112C and 112D of the Federal Constitution and enshrined in the Malaysia Agreement 1963 (MA63) — the very foundation upon which Malaysia was formed.
1️⃣ What the Constitution Actually Says
Under Article 112C and Part IV of the Tenth Schedule, the Federal Constitution clearly provides that Sabah is entitled to two-fifths (40%) of the net federal revenue derived from the state. This right is non-negotiable and not dependent on political goodwill.
However, the last proper review under Article 112D — which should occur every five years — was held in 1969. For over 50 years, the Federal Government has failed to comply with this constitutional duty.
That is why the Kota Kinabalu High Court recently ruled that the Federal Government had acted unlawfully.
2️⃣ The 1974 Turning Point
The year 1974 marked two critical events:
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The formation of Barisan Nasional (BN), and
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The cessation of Sabah’s 40% revenue entitlement payments.
From that point onwards, Sabah’s constitutional right was replaced with token “special grants” that had no relation to the 40% formula.
It was the beginning of a long era of financial injustice against Sabah.
3️⃣ The Facts and Figures: Sabah’s Real Contribution
Below is a summary of verified data that shows Sabah’s contribution to Malaysia’s economy and the scale of what has been withheld:
| Year | Sabah State Revenue (RM billion) | Source / Note | Remarks |
|---|---|---|---|
| 2021 | 5.45 | Bernama | Recovery period post-pandemic; strong fiscal base. |
| 2022 | 6.96 | Bernama | Revenue continues to rise, showing economic vitality. |
| 2023 | ~7.00 | Malay Mail | Sabah ranked 6th among Malaysian states by GDP contribution. |
| 2024 (LHDN Tax Collection in Sabah) | 5.7 | The Borneo Post | Federal revenue collected from Sabah alone. |
| Estimated 40% Entitlement | ~20.00 | The Borneo Post | Official Sabah government estimate. |
| Formal Data Requests to Federal Govt. | 13 times | Daily Express | All unanswered, preventing accurate computation. |
4️⃣ “We Spend More in Sabah” — A Flawed Excuse
The Prime Minister’s argument that “federal spending in Sabah exceeds revenue collected” is legally irrelevant.
The Constitution does not say:
“Sabah’s entitlement shall depend on federal development spending.”
It says clearly:
“Sabah is entitled to 40% of the net federal revenue derived from the state.”
Federal development spending — such as the Pan Borneo Highway, Sabah Heart Centre, or rural water projects — are national obligations. They are not substitutes for the 40% entitlement.
Some leaders claim that honouring Sabah’s rights would “bankrupt Malaysia”. This is not only insulting but economically baseless. Sabahans rightly argue that the Federation should learn to live less lavishly instead of continuing to grow rich from Sabah’s resources.
5️⃣ The Transparency Problem
The Sabah Government has submitted 13 formal requests for data on federal revenue collected from Sabah — including taxes, royalties, and other income — yet not a single response has been received.
Without this data, the constitutional review required under Article 112D cannot be carried out transparently.
This lack of accountability exposes a serious imbalance in the Federation’s financial relationship with Sabah.
6️⃣ The Court Has Spoken
On 17 October 2025, the Kota Kinabalu High Court ruled that the Federal Government acted unlawfully by failing to pay Sabah’s 40% entitlement from 1974 to 2021. The Court issued a mandamus order compelling the Federal Government to conduct a review and finalise payments within 180 days.
This is not a “misleading interpretation,” as the Prime Minister claimed — it is a judicial affirmation of Sabah’s constitutional rights.
7️⃣ Justice for Sabah
While the Federal Government highlights progress on MA63 — such as devolving electricity regulation and recognising technical departments — these are administrative matters, not restitution for financial rights long denied.
The 40% entitlement is a binding constitutional obligation, not a political favour. Sabah’s demand is simple: return what rightfully belongs to her people.
📣 Conclusion
This struggle is not just about money. It is about justice, autonomy, and respect.
If the Madani Government truly respects MA63, then it must:
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Release the full data on federal revenue derived from Sabah,
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Pay the 40% entitlement as required by the Constitution, and
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Restore arrears from 1974 to 2021 — the “lost years” of Sabah’s rights.
Sabah is not begging for charity. Sabah is demanding justice. And this time — the law is on Sabah’s side.
