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In the face of the recent embarrassment at the Court of Appeal, the Sabah government has yet to take reciprocal action.
Joe Samad, FMT
Governments come and go but the people of Sabah stay, for better or worse. In the public’s view, things have only gotten worse since the May 16 fiasco.
Public anger remains over the government’s poor handling of the 40% tax share case in the Court of Appeal. Many Sabahans are not interested in recriminations or blame games by experienced politicians.
Prior to May 16, the GRS Sabah government had made little statement on the Sabah Lawyers Society’s (SLS) application for judicial review over the dispute over the 40% special allocation granted to the state under the federal constitution.
After last-minute state intervention challenging the SLS’s position, it is clear that those in power have no idea what the people think about the 40% claim.
There had been an active campaign calling on Sabahans from all walks of life to go to the court on May 16 to lend moral support to SLS. Even the police knew about it and sent a full team to control the crowd.
Following the crushing defeat and public outrage, the government, the Attorney General (AG) and all political parties issued statements “supporting” SLS’s judicial review application.
Even Deputy Law and Institutional Reforms Minister M Kula Segaran appeared in the court while his boss Azalina Othman Said, who was on a “working visit”, said everyone has the right to take any dispute to court.
Unfortunately, the state did not send any senior cabinet ministers or representatives from the Attorney General’s Chambers to observe the court proceedings.
What happened to our elected officials? One would have thought that the government would have formulated an appropriate strategy to deal with SLS before the court hearings, instead of scrambling to do damage control afterwards and then just make some weak statements that would only make the GRS government look even more incompetent and incompetent than before. .
In 1999, former Sabah Chief Minister Haris Salleh said in a speech that the federal government has a constitutional obligation to share Sabah’s revenue and has the responsibility to develop Sabah’s society and economy.
Harris said although the special arrangement for sharing with Sabah the revenue collected by the federal government from state governments is clearly provided for in the 10th Schedule of the Federal Constitution, little is known about this arrangement.
In 2016, then-Sabah Party for Reform (STAR) chairman Jeffrey Kitingan said the state’s annual budget should include ensuring 40 per cent of the government’s net revenue collected from the state, as well as the federal government’s allocation for self-government.
Kitingan said the federal government owed Sabah “more than RM100 billion (excluding interest)” cumulatively since 1975.
Based on rough calculations and various statistics, the federal government may owe Sabah an estimated RM480 billion in back taxes. This is a staggering amount, but I believe it can be paid in installments through mutual negotiation.
Part of SLS’s judicial review is seeking directions on Sabah’s failure to pay its share for the past 48 years.
Prime Minister Anwar Ibrahim said in a statement that the revision of the special grant rate was implemented through a temporary solution which was gazetted on Nov 24, 2023. The payment of RM300 million in special grants for 2023 to the state governments of Sabah and Sarawak under the new rate has been completed.
However, some analysts questioned whether the new rate takes into account outstanding amounts from the past 48 years. The issue is part of a judicial review of the SLS.
State Finance Minister Masidi Manjun said although the Sabah government has made eight formal requests since 2022 for data needed to calculate Sabah’s 40% revenue entitlement, it has yet to receive a satisfactory response from the federal government.
“The deputy prime minister has given us a year to discuss this matter and we regard it as a commitment. If both parties are unable to reach an agreement on this matter by the end of July this year, then the state government has the option of appointing an independent assessor,” he said during the question and answer session in state parliament.
Masidi said once the deadline passes, the Sabah government will implement the requirements of the revenue rights in phases without complete data from the federal government, and the amount required will be calculated based on Sabah’s own assumptions.
The most important thing now is for Sabah to prove that it has the right governance to manage the billions of dollars in state coffers, including how to invest those funds in the welfare of the people. The best example is the Norwegian Government Pension Fund, which reportedly had assets of $1.1 trillion in 2021.
Sarawak has set up its own wealth fund with an initial allocation of RM8 billion. “Sarawak’s goal is for the fund to grow steadily over the next 20 years. We have drawn inspiration from funds such as the Norwegian sovereign wealth fund,” said Prime Minister Abang Johari Oppon.
In the face of the recent embarrassment at the Court of Appeal, the Sabah government has yet to take action.
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