Kota Kinabalu: Parti Solidariti Tanah Airku (Star) President Datuk Seri Jeffrey Kitingan has called on the Federal Government to stop twisting facts about Sabah’s 40 per cent revenue entitlement, describing recent statements from Putrajaya as “misleading and unconstitutional.”
He was responding to Treasury Secretary-General Datuk Johan Mahmood Merican’s remark that federal expenditure in Sabah, which rose from RM13 to RM14 billion previously and is projected to reach RM17 billion in 2026, exceeds the State’s 40 per cent entitlement.
“That claim is simply not true. The 40 per cent is Sabah’s and Sabahans’ constitutional right. It is neither a gift nor a subsidy,” Jeffrey said in a statement.
He explained that under Article 112C and Part IV of the Tenth Schedule of the Federal Constitution, the 40 per cent entitlement is based on revenues derived from Sabah, not on federal expenditure in the State.
“Federal spending on salaries or projects in Sabah has nothing to do with Sabah’s constitutional share. These are two completely different things,” he said.
Jeffrey pointed out that publicly available data shows the Federal Government collected around RM50 billion annually from Sabah in 2023 and 2024. By that calculation, he said, RM20 billion or 40 per cent rightfully belongs to Sabah.
He said revenues derived from Sabah are not confined to taxes collected within the State.
They include import and excise duties on vehicles sold in Sabah, petroleum income tax from oil companies operating in Sabah waters, corporate taxes from major plantation and industrial firms, and levies collected by federal agencies such as Customs, JPJ, JPN and Immigration.
“All these are part of the Federal Government’s total receipts from Sabah. Forty per cent of that must be returned to Sabah as stated clearly in the Constitution,” he said.
Jeffrey described the argument that federal expenditure offsets Sabah’s 40 per cent entitlement as “dishonest,” noting that the RM17 billion cited includes salaries and operational costs for teachers, doctors, police, and civil servants, standard federal obligations in every state.
“To imply that Sabah must fund these through its 40 per cent entitlement is false accounting.
“Even with those inflated numbers, the Federal Government still enjoys a surplus of RM13 billion annually from Sabah’s revenues,” he said.
He said part of the remaining 60 per cent share is intended for national security and development parity between Sabah and Malaya, adding that portraying it as a “subsidy” was a “blatant lie meant to turn Malaysians against Sabahans.”
Jeffrey further reminded Putrajaya that Sabah’s rights extend beyond the 40 per cent grant.
Under Part V of the Tenth Schedule, he said, the State is also entitled to import and excise duties on petroleum products worth over RM1 billion annually, as well as export duties on crude petroleum estimated at RM4 billion a year.
“These provisions exist because Sabah and Sarawak were recognised as equal partners in the Federation,” he said, adding that no law passed under Article 110 can block these entitlements.
He also urged federal officers to act professionally and not as “political operatives.”
“They are civil servants paid by taxpayers, including Sabahans. Their duty is to uphold the Constitution, not twist figures to serve political masters,” he said.
