Return Every Sen of 40% Entitlement Not Manifesto Promise

KOTA KINABALU -  “The Federal government should return every sen of the 40% net revenue jentitlement to Sabah and not make it as a worthless manifesto promise,” said Datuk Dr. Jeffrey Kitingan, President of Parti Solidariti Tanah.

Jeffrey who is also the assemblyman for Bingkor, said that it is highly likely that among the promises in the coming Sabah BN’s Manifesto would include the implementation of Sabah’s entitlement to 40% of net revenue collected in Sabah, as enshrined under Article 112C and Part IV of the 10th Schedule of the Federal Constitution.

“Since 1973, the Federal government has been paying Sabah only RM26.7 million annually as part of the 40% entitlement which was the sum agreed at the First Review in 1969.

And worse, the Federal and Sabah governments have also failed to hold the mandatory five-year reviews since 1973, a period of 45 years or 10 mandatory reviews in breach of Article 112D,” Dr. Jeffrey said.

“Due to this non-compliance, Sabah and Sabahans have been intentionally and unintentionally blatantly deprived of the much-needed funds for development which it could have enjoyed from the 40% entitlement.

The 40% would not only bring about Sabah's development but also crucial for the welfare and wellbeing of Sabahans,  which includes specialised education , rural health and security supplementation, amongst others.

“And despite promising in 2015 to look into the matter and forming a Special Committee, PM Najib has failed to deliver on his promise to return the 40% entitlement,” he added.

“The 40% entitlement is a clear constitutional provision. Opinions from Queen’s Counsel in London have clearly confirmed that the full 40% of revenues derived from Sabah are to be returned to the Sabah government.

Paragraph 24(8) of the IGC Report on the 40% entitlement clearly states that ‘the sum payable would be calculated on the basis of actual revenue received in each year’.

“It should be reminded to every Malaysian that Sabah is fully entitled to this 40% entitlement and it comes from revenues derived from Sabah and is not taken from the revenues of other States in the Federation.

While it has been made out as lame excuses that there are complications in calculating the 40% entitlement, in reality it is not so.

“At the first cut, there are many undisputable revenues such as income tax, petroleum income tax, customs and other government departments and agencies. They are revenues properly maintained and accounted for. Thus, getting the correct amount of the 40% accumulated over the decades shouldn’t be a problem and be returned to Sabah immediately.

“At the next level, it is also not too difficult to determine other revenues derived from Sabah especially from companies operating and deriving profits from their Sabah operations. Such companies would include petroleum companies, international oil companies, plantation companies, Felda, Felcra and the like.

“Apart from the 40% entitlement Sabah is also entitled to receive the full GST collections from Sabah, which gross to more than RM2 billion annually.  This GST collection should be returned to us as was the case with the previous Sales and Service Tax (SST) collections.

The 40% entitlement  which is estimated to give Sabah about RM20 billion annually and the GST collections do not yet include the arrears of the 40% entitlement which had accrued since 1974, which should total more than RM100 billion,” he concluded.