40% Revenue

The federal treasury loses RM8 billion in revenue every single year because it preferred total control over massive growth.By insisting on 100 per cent control of a starved economy, Putrajaya takes home RM10 billion. By settling for its legal 60 per cent share of a thriving Sabah, it would pocket RM18 billion annually.

This compounding error began in 1974, when administrative manoeuvres froze Sabah's 40 per cent constitutional cash handout at a flat RM26.7 million. This is what the central government’s “effort” to retain 100 per cent of the state's revenue as federal income.

THE QUESTION of what constitutes NET REVENUE remains the definitive battleground for Sabah’s fiscal future. As the court-mandated deadline approaches, the conversation has moved far beyond simple tax and duty collection.

Federal negotiators frequently point to high federal spending on schools, hospitals, and security within the state as justification for withholding the special grant. This defense fundamentally misunderstands the constitutional mathematics of the Malaysia Agreement 1963.

SABAH is currently powered by a budget that represents only a small fraction of its true worth. While the formal 2026 Budget stands at RM6.43 billion, the real engine of the state economy lies in the 40% Revenue Entitlement affirmed through the High Court order of 17 October 2025.

SABAH's demographic shift is a stark trend that many see as a direct reflection of deep-seated economic injustice. This has been a dramatic reversal over 40 years, reshaping Sabah's social and economic foundation.