Standing firm: Hajiji (second from left) meeting with Gabungan Rakyat Sabah leaders on the 40% tax revenue issue at his Seri Gaya residence.
KOTA KINABALU: Sabah will not relent in its pursuit of the 40% tax revenue owed to the state by Putrajaya, says Datuk Seri Hajiji Noor.
The Chief Minister said the Sabah government will never give up the fundamental constitutional rights of the state in relation to the 40% net revenue special grant under Articles 112C and 112D of the Federal Constitution.
Hajiji said this was reinforced by the Prime Minister (Datuk Seri Anwar Ibrahim) in his Budget 2023 speech when he confirmed that the Federal Government was committed to improving the rate of the special grant compared with what was previously agreed upon and would expedite negotiations to find a solution.
“This critical issue is now under the purview of the Malaysia Agreement 1963 (MA63) technical committee chaired by the Deputy Prime Minister,” said Hajiji.
“We will continue to defend Sabah’s constitutional rights in relation to the existing revenue-sharing formula and this must be respected by the Federal Government.
“It includes the state’s claim for the ‘Lost Years’ where no review was conducted from 1974 until recently,” he said yesterday.
Hajiji said this after the state government applied to intervene in the federal Attorney General’s appeal against a High Court decision on Thursday to grant the Sabah Law Society (SLS) leave to challenge the 40% special constitutional grant provisions.
The Sabah government was a respondent alongside the Federal Government in the judicial review application by the SLS, but the state government did not intervene or object to the case at the High Court stage.
The SLS had objected to the state government’s intervention but the AG, represented by a four-man team led by Senior Federal Counsel Shamsul Bolhassan and Ahmad Hanir Hambaly, did not oppose.
The three-member Court of Appeal panel comprising Justices Ravinthran N. Paramaguru, Mohd Nazlan Mohd Ghazali and Dr Choo Kah Sing granted the state government’s application to be an intervener and co-appellant against the leave granted to the SLS by the Kota Kinabalu High Court.
Tengku Datuk Fuad Ahmad, who represented the state, later said that if the Sabah government did not intervene, there was a risk that its right to challenge the Federal Government with respect to the 40% special grant provisions could be extinguished without being heard.
Hajiji said there was an interim arrangement – on a ‘without prejudice’ basis – presently where the state receives a higher amount than before, pending further negotiations between the state and federal governments to claim what is rightfully due to Sabah.
“The state government sees the initiative by the SLS in a positive light that is not partisan and not political in the common furtherance of the constitutional arrangements when Sabah helped formed Malaysia in 1963.
“Notwithstanding the ongoing proceedings in the Court of Appeal, we maintain the official demand of the state government of Sabah that the Federal Government is legally and constitutionally obligated to compensate Sabah for what is lawfully due as a special grant, both historically and for the future,” he said.
“This state right was negotiated prior to the formation of Malaysia and is enshrined in the Federal Constitution – it is the financial entitlement of the state.”
