Sabah hails hike in special grant, but not giving up on 40% tax revenue

 

Hajiji Noor (second left) in a video conference chaired by Prime Minister Ismail Sabri Yaakob today to discuss the Malaysia Agreement 1963. (Sabah chief minister’s department pic)

KOTA KINABALU: The Sabah government has welcomed the increase in the special grant payment to the state by Putrajaya.

Chief minister Hajiji Noor, however, said the state would not drop its pursuit of 40% of revenues collected by the federal government to be returned to Sabah.

“It is a very good development for Sabah. It shows that the federal government is prepared to listen to us. This is a positive sign.

“But negotiations are still ongoing to get the 40% as agreed in the Malaysia Agreement 1963 (MA63),” he said in a statement today.

Earlier today, Prime Minister Ismail Sabri Yaakob announced that Putrajaya would increase its annual payment to Sabah to RM125.6 million this year, more than quadruple the RM26.7 million paid previously.

Ismail also said the amount would increase every year from 2023 to 2026 according to a rate agreed by Putrajaya and the Sabah government.

He added that this decision came after the federal and state governments reached a consensus on reviewing the special grant to Sabah under Article 112D of the Federal Constitution.

Deputy chief minister Bung Moktar Radin also gave the thumbs-up to the increment, saying many more development programmes could be implemented in Sabah.

“However, the special grant will mean nothing if our delivery system is not up to mark,” the Kinabatangan MP said in a statement.

Opposition leaders have raised questions on the new special grant amount.

Upko president Wilfred Madius Tangau urged the state and federal governments to disclose the basis on which they agreed on the new amount.

The Tuaran MP was also worried if the state would eventually compromise its stand on the 40% tax sharing formula, which is provided for under Article 112C of the Federal Constitution.

“Finance minister Tengku Zafrul Aziz had previously said the new revenue sharing formula between the Sabah and federal governments will render the 40% formula inapplicable. How can you abrogate Article 112C just like that?

“We in Upko and Pakatan Harapan (PH) cannot agree on that and our stand is that we will never compromise on the 40% formula,” he told FMT.

Sabah DAP secretary Phoong Jin Zhe denied that this was the first time the special grant had been increased since 1969, with reference to Hajiji making such a claim in a Facebook post.

The Luyang assemblyman said the PH government had in fact increased the payment when it was in power in 2019.

He said then finance minister Lim Guan Eng had announced during the tabling of the 2020 federal budget that the rate would be doubled to RM53.4 million.

He added that there had also been plans to double the rate again to RM106.8 million within the next five years.

“That means what the federal and state governments are doing now is basically going back to the framework adopted during the PH administration.

“But I still think this is a good start to return justice to Sabahans.” - FMT