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PRESS STATEMENT

Official Position of the State Government of Sabah in Relation to the

Constitutional Right to Claim the 40 percent Net Revenue from the Federal
Government

No Compromise on the 40 percent

The State Government of Sabah categorically confirms that it will never give up the
fundamental constitutional rights of the State of Sabah in relation to the 40 percent Net
Revenue special grant under Article 112C and 112D of the Federal Constitution.

This fact is reinforced by the Prime Minister of Malaysia in his 2023 budget speech when
he recognised and confirmed that the Federal Government is committed to improve the
rate of the special grant compared to what was previously agreed and will expedite the
negotiations to find a solution. This critical issue is now under the purview of the MA63
Technical Committee chaired by the Deputy Prime Minister.

We will continue to defend the State of Sabah’s constitutional rights in relation to the
existing revenue sharing formula and this must be respected by the Federal
Government. This includes the State's claim for the "lost years" where there has been
no review conducted from 1974 until recently.

For now, there is an interim arrangement - on a without prejudice basis - where the State
receives much more than before pending further negotiations between the State and
Federal Government to claim what is rightfully due to the State of Sabah. In fact, pending
the ongoing negotiations, the interim amounts have been increasing from RM125.6
million in 2022 and from the RM260 million announced in January 2023 to RM300 million
in July 2023. Whilst this falls short of what is expected, we have been committed and
consistent in seeking more from the Federal Government than ever before.

In the meantime, let me be crystal clear, we respect the right of the Sabah Law Society
to commence legal proceedings on this matter. We recognise the important role that
public interest litigation has in promoting the rule of law towards the fair and equitable
administration of justice. The State Government sees the initiative by the SLS in a
positive light that is not partisan and not political in the common furtherance of the
constitutional arrangements when Sabah formed Malaysia in 1963. I do not want to pre-
judge the outcome of the Court of Appeal but I share the same sentiment as the rakyat
of Sabah and hope that any decision will be favourable to the State.

“SABAH MAJU JAYA”

Pejabat Media dan Komunikasi, Jabatan Ketua Menteri, Aras 31, Blok A, Menara Kinabalu,
Jalan UMS, Teluk Likas, 88400 Kota Kinabalu, Sabah.
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I have already instructed the State Attorney General to scrutinise and review the ongoing
legal proceedings and if necessary, to correct any misguided statement that differs from
the State's clear and formal position.

Notwithstanding the ongoing proceedings in the Court of Appeal - we maintain the official
demand of the State Government of Sabah that the Federal Government is legally and
constitutionally obligated to compensate the State of Sabah for what is lawfully due as
a special grant, both historically and for the future. This State right was negotiated prior
to the formation of Malaysia and is enshrined in the Federal Constitution. It is the
financial entitlement of the State. This stand is very much more than an aspiration.

If there is no agreement or solution between the State and the Federal Governments on
the special grant, we will move to activate the constitutional provision to appoint an
independent assessor to determine this issue and decide what the Federal Government
is obligated to pay to Sabah.

I assure the rakyat of Sabah that we will not stop in our relentless pursuit of all the State
rights due under MA63 and the Federal Constitution. This is our uncompromising and
absolute position.

DATUK SERI PANGLIMA HAJI HAJIJI HAJI NOOR

Chief Minister of Sabah

17 May 2024

“SABAH MAJU JAYA”

Pejabat Media dan Komunikasi, Jabatan Ketua Menteri, Aras 31, Blok A, Menara Kinabalu,
Jalan UMS, Teluk Likas, 88400 Kota Kinabalu, Sabah.