KOTA KINABALU, Aug 5 — Putrajaya owes Sabah approximately RM4 billion under the special grant stipulated under the Federal Constitution as a return of revenue from the state, said Sabah Law Society immediate past president Datuk Roger Chin.

The figure is derived from an announcement by Prime Minister Datuk Seri Anwar Ibrahim, who yesterday said that the federal government derived some RM10.2 billion from the state in taxes and other revenues.

“Sabah’s entitlement to the 40 per cent special grant, as stipulated in the Malaysian Constitution, is distinct from regular federal allocations. Consequently, Sabah should receive approximately RM4.08 billion as a direct constitutional entitlement,” said Chin.

Anwar yesterday announced in his speech during a Parti Keadilan Rakyat assembly that Putrajaya has derived at least RM10.2 billion from Sabah, including RM7.2 billion in taxes from the Inland Revenue Board and petroleum payments of RM1.7 billion.

Article 112D of the Constitution provides for a special grant of 40 per cent return of revenue from the state.

The SLS is currently in a legal dispute with the federal government to compel the latter to pay the state the 40 per cent. The judicial review is pending an appeal from Putrajaya.

Chin also said that there should be a clear distinction between Putrajaya’s operational and development expenditure for the state after Anwar clarified its RM16 billion allocation for the state.

“While the RM16 billion allocation is significant and necessary for Sabah’s ongoing support, it should not overshadow the state’s entitlement to the 40 per cent special grant.

“The distinction between federal duties and state rights is critical in maintaining the integrity of the Malaysian Constitution and ensuring that Sabah receives the support it is rightfully owed,” he said.

Chin emphasised that development and operational funds should not be confused or seen as a substitute for the 40 per cent special grant, which is a separate constitutional entitlement.

“The RM16 billion allocation addresses areas that are inherently federal responsibilities. These include education, security and infrastructure, which are essential services that every state expects and receives as part of the federation.

“The special grant is designed to address the unique needs and contributions of Sabah, providing additional financial support beyond standard federal allocations. This ensures Sabah can develop on par with other states and address specific regional challenges,” he said.

He said that the situation shows the need for ongoing dialogue between federal and state governments for respectful negotiations to secure Sabah’s rights and development needs.

https://www.malaymail.com/news/malaysia/2024/08/05/putrajaya-owes-sabah-rm4b-under-40pc-revenue-grant-says-legal-expert/146102