Take Action to Claim 40% Entitlement Net Revenue for Budget 2016 - Dr. Jeffrey

KOTA KINABALU - “In another 6 months, the Chief Minister will be presenting Sabah’s State Budget for 2016.   The Sabah government and the Chief Minister should take immediate action to claim Sabah’s 40% entitlement of the net revenue collected from Sabah and present it in Budget 2016” said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief, following up on the opinion by constitutional lawyer Edmund Bon that the 40% is Sabah’s legitimate right under the Federal Constitution.

Edmund had given his opinion at the recent Sabah Rights Forum organized by Dato’ Sri Anifah Aman and part of the Foreign Ministry’s outreach program held at UMS recently.

In fact, the constitutional lawyer had opined that there appeared to be no records of any review since 1973 of the entitlement last paid in 1974.  He added that claiming for the 40% was as simple as doing up a letter to the federal government which can be sent the next day.

He further added that Sabah was entitled to all arrears of the 40% from 1975 which appeared to be last paid in 1974.   This arrears is potentially worth more than RM100 billion before adding interest on the arrears into account.

There is no excuse for the Sabah government not to claim for the return of this 40% entitlement as it is entrenched in the 10th Schedule of the Federal Constitution.   It is as clear as daylight and the failure of the federal government to return the 40% is as good as daylight robbery.

If the Sabah government is still doubtful, a legal opinion should be obtained from the Sabah State Attorney General.

At the same time, the Sabah government should also ask for reimbursement of the 10% export duty of all oil and gas exported from Petronas oil and gas output from Sabah.   This was another item highlighted by Edmund as Sabah’s entitlement of up to 10% export duty also under the 10th Schedule.

This 10% export duty is potentially worth RM2.3 billion for 2016 if the Budget 2015 forecast of the 5% oil royalties or cash payment of RM1.15 billion is used as a yardstick.

The 40% entitlement, according to Edmund, would include the 95% revenue that Petronas takes from Sabah’s oil and gas.  This could be worth RM8.72 billion based on Budget 2015 figures.

The 40% entitlement on other revenues include federal income tax, the RM1.2 billion expected from GST and other revenues of federal departments and agencies which could be worth another RM10-RM20 billion.   This could be very much higher if we add the incomes generated by international oil companies operating on Sabah’s oil and gas with Petronas, Felda with its massive 306,000 acres plantation and major oil palm plantations such as Sime Darby, IOI, KL-Kepong and many other businesses who are not Sabah-based but with major operations in Sabah.

The total revenue from the 40% entitlement and the 10% export duty on petroleum exports could add another RM21.02-RM31.02 billion to Budget 2016, making Sabah the richest income generating State in Malaysia.   This has not even included an increase of the present 5% cash payment to 20% as demanded by the Sarawak government, which will add another RM3.45 billion.

If the Sabah government refuses to claim for return of the 40% entitlement and 10% export duty, it will lose the right to be the legitimate government representing Sabahans and should tender its resignation and call for fresh elections to elect a new and more responsible Sabah government caring for the interests, welfare and well-being of Sabahans.