KOTA KINABALU: The federal government has never questioned Sabah’s entitlement to 40 per cent of state revenue as stated in the federal constitution.
In defending this right, the minister in the Prime Minister’s Department (Sabah and Sarawak), Datuk Mustapha Sakmud, agrees that Sabah’s claim to the 40 per cent revenue is not a form of charity or grant.
“As such, this matter (the statements from Sabah’s representatives) needs to be clarified accurately based on facts and the framework of the Federal Constitution,” he said in a statement today.
Mustapha emphasised that efforts to implement the matters under the Malaysia Agreement 1963 (MA63), including the demand for 40 per cent of Sabah’s revenue, are ongoing through various official platforms.
At the federal level, he stated that the MADANI Government has strengthened the implementation mechanism by establishing the MA63 Implementation Action Council (MTPMA63), chaired by the Prime Minister, and the MA63 Technical Committee, chaired by the Deputy Prime Minister.
So far, Mustapha mentioned that 13 out of 29 issues have been successfully resolved, reflecting the government’s ongoing commitment to implement MA63 progressively but consistently.
“Regarding the specific issue of 40 per cent of Sabah’s revenue, negotiations are currently being conducted through the Special Grant Negotiation Committee, chaired by the Chief Secretary of the Treasury and involving the Sabah State Government,” he said.
Mustapha stated that the negotiation platform focuses on:
– The finalisation of the calculation formula based on the Federal net revenue from Sabah in accordance with Articles 112C and 112D of the Federal Constitution;
– The coordination and verification of revenue data involving key agencies such as the Inland Revenue Board (LHDN) and the Customs Department for the current period, including previous years;
– An examination of the “lost years” issue, which refers to the payment periods that have remained unresolved for a long time and require a fair and mutually agreed approach;
– Discussions on a phased implementation mechanism to ensure that payments can be carried out in an orderly and continuous manner.
Additionally, Mustapha mentioned that a series of coordination meetings have been held with the Sabah State Government, including with the Sabah Finance Minister and senior officials from the Malaysian Treasury, to detail the way forward and expedite the finalization process.
He noted that data exchange between the Federal Government and the Sabah State Government for the period from 2007 to 2025 has also been implemented.
He stated that both parties now have a clearer understanding of the figures and calculation methods involved.
At the same time, Mustapha indicated that the government is also enhancing transparency and monitoring of the implementation of MA63 through the development of the MA63 Implementation Status Dashboard.
He mentioned that Phase 1 has already been implemented to allow for basic monitoring of the progress of each matter, while Phase 2 is under development to expand functions, including more detailed monitoring, data integration between agencies, and more comprehensive real-time information access.
Mustapha emphasized that all these efforts demonstrate that the negotiations are not static but are progressing in a structured manner based on facts and constitutional provisions.
This issue requires a responsible approach focused on long-term solutions. Our priority is to ensure that Sabah effectively receives its rights, rather than merely becoming a political controversy, he stated.
Mustapha mentioned that interim payments are only a temporary solution until a final resolution is reached with the agreement of both the State and Federal Governments.
“Any efforts to increase the value of interim payments are justified to drive infrastructure development for the well-being of the people of Sabah,” he said.
