Kota Kinabalu: Sabah is continuing negotiations with the Federal Government on its 40 per cent revenue entitlement despite the ongoing court proceedings involving the “lost years”, said Deputy Chief Minister II cum Finance Minister Datuk Seri Masidi Manjun.
He stressed that the matter must be clearly understood as involving two separate components — the claim for arrears, or “lost years” (1974 to 2021) and the current (years) entitlement.
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“The case brought by Sabah Law Society (SLS) relates to the lost years. So the court decision is in respect of the lost years, not the current one. The current one, we are still negotiating,” he said when asked on the latest developments following the Court of Appeal’s decision to grant a stay.
He said the appeal would not affect ongoing negotiations on the current claim, as both issues are distinct.
“For the record, the State Government objected to this appeal, but the Court of Appeal thinks otherwise and found there is merit to hear the case,” he said.
“We have to respect the decision of the Court of Appeal because it is part of the court procedure. The best thing would have been for the Federal Government not to appeal, but since they appealed, we will have to respect the court’s decision.”
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“That doesn’t mean we just sit down, because we are currently talking on the issue of the current demand for the 40 per cent,” he said.
“The lost years refer to arrears. What we are talking about now is not only about the lost years but also the current years — this year, last year, or even the previous year, depending on the scope,” he said, adding Sabah submitted its claim about two years ago, which forms the basis of the current negotiations.
“We have put our claim about two years ago, and that is what we are claiming, and that is what we are still talking about,” he said.
Masidi said the main issue lies in determining how the 40 per cent entitlement should be calculated, particularly which revenue streams should be included.
“It’s basically about how to calculate the 40 per cent — what sort of revenue should come under it. That involves giving statistics for all the revenue collected from Sabah,” he said.
While acknowledging that some data may not be readily available, he said Sabah had proposed a practical approach to move negotiations forward.
“We said, ‘why don’t we start with the revenue that is never in dispute. For instance, statistics from Inland Revenue Board (LHDN) and Customs, which are published every year’,” he said. Masidi described this as focusing on “low-hanging fruit” to allow progress while more complex issues are being resolved.
“Why don’t we take the 40 per cent from those where the data is never in dispute by both sides? That is what we are talking about now,” he said, adding that discussions on the proposal are ongoing and the State is awaiting a response.
He also clarified that the 180-day timeline often mentioned applies only to the court case on arrears and not to the current negotiations.
“That timeline is only applicable to the lawsuit. The current claim was never part of the court case,” he said.
Asked whether any figures had been agreed upon, Masidi said none have been finalised so far.
On the timeline for resolving the matter, Masidi acknowledged that no firm deadline has been set but stressed the need for progress.
“Our stance is simple — sooner or later, we must determine a timeline for resolution,” he said.
“We have come up with our figures, but if they are not agreeable, then under the Constitution, we can appoint an independent assessor to determine what Sabah is entitled to,” he said.
While acknowledging the Federal Government’s fiscal challenges, Masidi said Sabah remains pragmatic in its approach.
“We understand the financial position of the Federal Government may be challenging. We are reasonable people and we understand the country’s situation,” he said.
Nevertheless, he reiterated the State’s hope of reaching at least a preliminary settlement.
“We really hope that we can reach some sort of settlement, even if it is a preliminary one. At least we have a start,” he said.
