Sabah’s 40% Revenue Entitlement : Constitutional Implementation Requires Legal Certainty

7 December 2025

KOTA KINABALU: The Sabah Law Society (SLS) notes the Prime MINISTER Datuk Anwar Ibrahim ’s recent statement that the Federal Government intends to finalise the technical parameters relating to Sabah’s 40 per cent revenue entitlement by mid-January 2026.

The Society recognises the importance of clarity regarding the methodology, quantum, and payment structure. Such clarity is essential for effective implementation.

In a statement released by its Datuk Mohamed Nazim Maduarin it must be emphasised that Sabah’s 40 per cent revenue entitlement is neither a discretionary grant nor a matter to be treated as a policy concession.

This entitlement arises from express provisions of the Federal Constitution agreed upon at the formation of Malaysia and reflects Sabah’s distinctive fiscal position within the Federation, he stated.

According to him, any exercise to determine technical or administrative parameters must therefore be undertaken strictly as a matter of constitutional compliance.

"While implementation mechanisms may facilitate payment, they cannot qualify, diminish, postpone, or redefine an entitlement that exists as of right."

Although discussions between governments may explore phased implementation or administrative arrangements, such discussions do not alter the legal nature of the entitlement itself.

For the avoidance of doubt, the Society notes that the appeal proceedings concerning Sabah’s 40 per cent revenue entitlement remain ongoing. The matters before the courts are separate from executive discussions on implementation and are not affected by them.

The legal proceedings initiated in respect of the 40 per cent revenue entitlement have always been institutional in nature and pursued in the public interest, with the aim of securing legal certainty, constitutional fidelity, and transparency in the treatment of Sabah’s rights.

The SLS will continue to monitor developments closely and remains firmly committed to upholding the Constitution, safeguarding the rule of law, and ensuring that Sabah’s position within the Federation is honoured in both law and practice.