Anwar Reaffirms Putrajaya’s Commitment to Sabah’s 40% Revenue Entitlement

KOTA KINABALU — Malaysia’s Prime Minister Anwar Ibrahim has reaffirmed the federal government’s firm commitment to Sabah’s constitutional entitlement to receive 40 per cent of the net federal revenue collected from the state, declaring that the matter is final and will not be subject to appeals or further negotiations.

Speaking during an official engagement in Sabah, Anwar stressed that the federal administration respects the legal and constitutional basis of the revenue-sharing arrangement and will ensure that Sabah’s rights are upheld in accordance with the provisions set out in Malaysia’s Federal Constitution.

The Prime Minister emphasised that the issue should not be politicised, adding that the federal government recognises Sabah’s historical and constitutional position within the Malaysian federation. According to him, the government’s stance reflects its commitment to fairness, transparency, and the rule of law in addressing longstanding matters involving the state’s financial rights.

The question of Sabah’s 40 per cent revenue entitlement is rooted in the financial arrangements agreed upon when Malaysia was formed under the Malaysia Agreement 1963, which laid the foundation for the federation and established special provisions for the states of Sabah and Sarawak.

Under the Federal Constitution, Sabah is entitled to receive 40 per cent of the net revenue derived from the state by the federal government. However, the implementation and calculation of this entitlement have been the subject of ongoing discussions and legal proceedings for many years.

The issue gained renewed attention after the High Court of Malaysia ruled that the federal government and the Sabah state government must work together to review and determine the exact amount owed to the state based on the constitutional formula.

The review process involves examining federal revenue collected in Sabah over several decades. Analysts say the calculations could potentially involve billions of ringgit, depending on the methodology used and the period considered in the assessment.

Government officials explained that the process requires detailed financial analysis, including evaluating revenue streams such as taxes, duties, and other federal income generated within the state. Authorities from both the federal and state governments are expected to cooperate closely in reviewing historical financial data to determine the appropriate figure.

Anwar said the federal government is committed to resolving the matter responsibly while maintaining strong cooperation with the Sabah state administration. He noted that the goal is not only to settle the issue legally but also to ensure that the outcome contributes to Sabah’s long-term development.

The Prime Minister added that the federal government continues to prioritise economic development in Sabah through infrastructure projects, investment initiatives, and development allocations aimed at improving connectivity, economic opportunities, and living standards for residents in the state.

Sabah, located on the island of Borneo, plays an important role in Malaysia’s economy due to its natural resources, tourism industry, and strategic location in Southeast Asia. The state has long advocated for greater recognition of its rights under the Malaysia Agreement, including issues related to autonomy, resource management, and revenue distribution.

Political analysts say the reaffirmation by Anwar signals the federal government’s willingness to address historical grievances while strengthening relations between the central government and the Bornean states.

Observers also note that resolving the revenue entitlement issue could mark an important step in reinforcing the principles of federalism in Malaysia and ensuring that the original commitments made during the formation of the federation are fully respected.

As discussions and financial reviews continue, both federal and Sabah authorities are expected to work towards a comprehensive resolution that balances legal obligations, economic considerations, and the broader goal of strengthening national unity.