40% net revenue is constitutional right of Sabah, only Question of amount - Dr. Jeffrey

KOTA KINABALU - “There is no confusion and no dispute that the 40% net revenue derived from Sabah is legally and constitutionally payable to Sabah under the Tenth Schedule of the Federal Constitution. The Sabah government should take action to implement them not beat around the bush trying to please their political masters in Kuala Lumpur and Putrajaya and only giving lip service that they support the move,” said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief, following up on verbal support by Sabah leaders on the setting up of the Special Committee by PM Najib to look into the payment of the 40% entitlement.

Dr. Jeffrey who was present at the presentation of the Memorandum on the Special Grant and Additional Revenues assigned to Sabah under Parts IV and V of the Tenth Schedule including the 40% net revenue entitlement of Sabah to PM Najib on last Wednesday added that Najib had agreed that if the payment was provided to be paid under the Federal Constitution then it should be honoured and paid to Sabah.

“The only issue is what the actual amount payable to Sabah is?” added Dr. Jeffrey.

There are huge collections of revenue derived from Sabah by the federal government from companies and other entities that are not Sabah based but with profits derived from operations in Sabah.   Examples are major oil, plantation and other trading companies operating in Sabah but based in Malaya or Sarawak.  This issue was highlighted in the Memorandum submitted to the Prime Minister.

At the time of the formation of Malaysia in 1963, the Sabah leaders were magnanimous in agreeing to contribute 60% of Sabah’s revenues to the federal government in return for the assurances of development and security to be provided by the federal government.

However, whether development and security was provided to Sabah is a major bone of contention by most Sabahans.   Almost all genuine Sabahans agree that the federal government failed to provide development or security to Sabah.   Even Najib has acknowledged that past leaders have not done enough for Sabah and Sarawak.

In fact, the wanton issuance of dubious ICs and MyKads which have contributed to the instability in the East Coast of Sabah with Esscom even acknowledging that the insecurity is partly due to enemies within due these IC holders.

Given that the federal government had failed to provide the requisite development comparable to Malaya and if the matter is now brought before the constitutional Court or Court of law, it is likely that Sabah will be waived from contributing the 60%.

In fairness and in the spirit of federalism, the federal government should immediately remit the 40% entitlement starting in 2016 on those revenues that are not in dispute such as income tax, GST, customs duties and other collections by federal departments and agencies while efforts are made to compute the actual amount payable.

At the same time, efforts should also be focused to determine the outstanding arrears and accrued interest on the 40% entitlement that was not paid since 1974/1975.

Also included in the Memorandum was the 10% export duty on petroleum exported from Sabah to be assigned to Sabah in lieu of royalties and a revision of the import and excise duties on petroleum products currently fixed and grossly undervalued at RM120 million annually whereas consumption had arisen to record levels of RM8.5 billion in 2013 and still increasing annually.

Meantime, the Umno-led Sabah government should be thankful and not blame the people for highlighting issues that the government had failed to take up due to being tied up by party politics, vested interests or being ignorant of Sabah rights.

The Sabah government were caught napping for failing to take up the 40% entitlement which is legally and constitutionally payable by the Federal government.    Many Sabahans are angry with their government for failing to act and safeguard Sabah’s constitutional rights on the 40% and other additional revenues assigned to Sabah.

The Sabah government could have acted through the National Finance Council (NFC) provided under Article 108 of the Federal Constitution in which Sabah is entitled to a permanent representative and required to meet at least once a year.   The NFC was tasked with decision on federal grants and assignment of revenues.  The issue of the NFC was also highlighted in the Memorandum given to PM Najib.

The present Sabah government should not only support the calls for Sabah rights including the 40% entitlement to be respected and fulfilled but take action for them to be implemented by the federal government rather than resisting and brushing them aside just because they were made by opposition leaders.

Otherwise, these Sabah leaders will be seen as only serving the political interests of their political masters in Kuala Lumpur and rejected by Sabahans for failing to act in the best interests of Sabah and Sabahans.   In Scotland, the people went a further step and booted out the Scottish government and voted in 56 nationalists out of 59 MPs who were wanting better autonomy and rights for Scotland.