Sabah’s untapped wealth: RM30b a year possible if constitutional entitlements honoured, says Jeffrey Kitingan

KOTA KINABALU, Dec 16 — Sabah’s annual revenue could exceed RM30 billion if all constitutional entitlements owed to the state are fully implemented and collected, said Parti Solidariti Tanah Airku (STAR) president Datuk Seri Jeffrey Kitingan.

Kitingan said the RM6.43 billion revenue projected under the Sabah 2026 Budget was only a fraction of what the state is constitutionally entitled to, citing long-standing failures to implement key financial provisions under the Federal Constitution.

“In fact, Sabah’s revenue for 2026 could potentially exceed RM30 billion if all revenues belonging to Sabah under the Constitution are fulfilled and paid,” he said during the Sabah State Assembly sitting today.

He pointed to the long-delayed 40 per cent special grant under Articles 112C and 112D of the Constitution, as well as Sabah’s rights to collect import and excise duties on petroleum products and export duties on crude oil.

He said Sabah is entitled to collect import and excise duties on petroleum products under the Tenth Schedule of the Constitution, which could yield at least RM1 billion annually — compared to the RM120 million currently collected.

He added that Sabah also has the right to impose export duties on crude oil in lieu of oil royalties of up to 10 per cent ad valorem, which could generate about RM3.6 billion a year.

“This means the total could reach RM30 billion,” he said.

Kitingan also pointed out that Prime Minister Datuk Seri Anwar Ibrahim had previously stated that the federal government collected RM10.2 billion from Sabah in 2023 — a figure he said was understated.

“If customs collections are correctly accounted for, the total collected from Sabah in 2023 would reach at least RM11.5 billion,” he said, adding that this did not include taxes paid by international oil companies, major palm oil corporations, or federal agencies operating in the state.

“I would like to ask whether these constitutional revenues can be included in the 2026 Budget, since they are Sabah’s rightful revenues and should be collected and accounted for,” he said, addressing the state finance minister.

Addressing claims that returning the 40 per cent share would bankrupt the Federal Government, he dismissed the argument.

“That money is Sabah’s own money. It is not federal money or money from other states,” he said.

The Tambunan assemblyman said one of the main reasons Sabah has failed to collect these revenues in the past was political weakness and reluctance to assert its rights.

Despite being labelled Malaysia’s poorest state, he said that Sabah was in fact resource-rich but had been systematically deprived of its rightful wealth.

“The reality is that Sabah and its people are actually wealthy. They have merely been impoverished and misled, and a large part of this is contributed by our own leaders,” he said.

He cited an October 17 High Court ruling which affirmed Sabah’s entitlement to the 40 per cent revenue collected by the federal government and found that mandatory reviews had not been conducted since 1974, underscoring that the right had always existed.

To secure Sabah’s financial rights, Kitingan proposed the creation of a new revenue collection mechanism, including a consolidated account in Sabah where all federal collections from the state would be deposited pending distribution under constitutional requirements.

Jeffrey concluded by urging the Sabah government to establish a special bipartisan MA63 Cabinet committee to oversee negotiations and safeguard the state’s constitutional rights.

“Given the importance of these issues, a special Cabinet committee comprising both government and opposition members should be formed to protect Sabah’s interests,” he said.