Federal govt reaffirms commitment to Sabah’s 40 pct special grant

KOTA KINABALU (Jan 29): The federal government has reaffirmed its commitment to Sabah’s constitutional right to a 40 per cent special grant of the state’s net revenue, following recent negotiations with the Sabah government.

The matter was raised in the Dewan Rakyat on Tuesday, when Tuaran MP Datuk Seri Panglima Madius Tangau questioned the government’s progress in implementing the grant.

In a written reply, the Finance Ministry confirmed it has taken note of the Kota Kinabalu High Court’s Oct 17, 2025, decision on the special grant and has decided not to appeal.

“The federal government respects the principle of the special grant as provided under the Federal Constitution, including the 40 per cent rate of Sabah’s net revenue,” the ministry said.

Negotiations with Sabah continued on Nov 17, 2025, reviewing the grant under Articles 112C and 112D of the Constitution, while considering both parties’ financial positions.

Discussions also covered the formation of an Officer-Level Special Grant Negotiation Committee, including its membership and terms of reference.

The next round of negotiations took place on Jan 28, with both parties committed to conducting discussions in an orderly and progressive manner.

“The implementation of the 40 per cent special grant remains a key demand under the Malaysia Agreement 1963 and continues to attract public attention in Sabah,” the ministry added.