IT will be difficult for Sabah to determine its 40% revenue entitlement, including the sum owed by Putrajaya, as the federal government had opted for fixed payment in the 1970s, said Mohd Shafie Apdal.

The chief minister said the Customs Department, Inland Revenue Board, Immigration Department, Petronas and others do not share their collection figures with the state government, only with Putrajaya.

“On the amount, in principle, the Sabah government’s demand is in accordance with the federal constitution, that is, two-fifths of the revenue from Sabah, and this revenue refers to the ‘accrued revenue’.

“But it is not easy when I request for detailed figures from state and federal agencies on the accrued revenue. At the state level, we have no way to study the details as the revenue is collected by federal agencies,” he said during the question-and-answer session in the state assembly today.

Jeffrey Kitingan (Tambunan-Star) asked when the state government will demand the revenue it is entitled to, which amounts to RM1 trillion backdated since the 1970s.

The federal government had opted for a fixed amount in the 1974 instead of honouring the 40% revenue entitlement in accrued payment, as stipulated under the federal constitution. It had also refused to carry out a review of the matter, although mandatory under Article 112 D of the constitution.

According to records, Sabah’s entitlement began with RM20 million in 1969, and grants were paid out each year after that, with the last at RM26.7 million in 1973. The figure has not increased since.

However, Parti Warisan Sabah deputy president Darell Leiking has said if all the provisions of the federal constitution were met since 1963, Putrajaya possibly owes Sabah some RM1 trillion under the 40% special entitlement.

Shafie said since the establishment of the steering committee to review the Malaysia Agreement 1963 on September 5 last year, progress has been made on the return of state rights, pointing to four meetings held between December and July 23.

Several matters have been agreed on in relation to returning Sabah and Sarawak’s rights, he said, adding that his administration filed a structural guideline on the implementation of the special grants on July 9.

“I will leave it to the prime minister to announce what the committee has agreed on. But on the guideline, we are still awaiting Putrajaya’s response.”

Shafie, who is also Warisan president and Semporna MP, said the Sabah government has asked the state Finance Ministry and Economic Planning Unit to compile data on federal agencies’ revenue.

On Petronas, he said the state government has many other alternative options to its 20% oil royalty demand if the amount would cause financial issues for the national oil company.

He said the state is willing to take on equity in Petronas and enjoy dividends or shares like Putrajaya, which is a stakeholder in the firm.

At present, Sabah only gets a 5% oil royalty, as does Sarawak. Putrajaya, meanwhile, gets a 3% oil royalty, plus tax and dividends.

Shafie said Sabah, too, should be able to enjoy three sources of revenue like the federal government.

He added that it is not a good idea to accuse Putrajaya of violating the federal constitution, as the Pakatan Harapan administration is open to returning state rights.

There must also be consensus when making decisions related to such rights, said Shafie. – August 7, 2019.