Prime Minister Anwar Ibrahim has announced that Sabah’s interim allocation will be increased to RM1.5 billion from RM600 million while discussions continue on the state’s constitutional claim to a 40% share of federal revenue derived from Sabah.
Speaking at the 2026 Sabah Kaamatan Festival at the Hongkod Koisaan Hall of the Kadazandusun Cultural Association in Penampang, Anwar said the Madani government remains committed to implementing the entitlement provided under the Malaysia Agreement 1963 (MA63).
“The Madani government has established that the implementation of Sabah’s 40% entitlement is a policy that must be carried out. There is no longer any debate about whether it should be implemented.
“What remains is to refine the mechanism and method of implementation,” he said.
Government committed to implementing entitlement
Anwar stressed that the federal government has no intention of delaying the process and is focused on ensuring that every decision is carried out carefully and responsibly.
He said discussions are still ongoing because any decision involving MA63 would have wider implications for federal-state relations as well as other states.
According to him, the interim allocation demonstrates the government’s commitment to meeting its obligations to Sabah while negotiations are being finalised.
“This interim payment is not the final solution, but it demonstrates the government’s commitment to fulfilling its responsibilities to Sabah while the negotiation process is concluded in the near future,” he said.
Court proceedings still ongoing
In April, the Court of Appeal granted the federal government’s application for a stay of execution on a High Court order concerning Sabah’s entitlement to a 40% share of net federal revenue collected from the state.
The stay will remain in effect pending the disposal of the federal government’s appeal.
The legal proceedings continue as discussions on the implementation mechanism move forward.
GRS welcomes recognition of Sabah’s rights
On Thursday, Gabungan Rakyat Sabah secretary-general Armizan Mohd Ali said Anwar’s acknowledgement of Sabah’s constitutional right to the 40% revenue entitlement had strengthened the state government’s efforts to accelerate development initiatives.
Armizan said that although the matter remains before the Court of Appeal, GRS maintains that the latest review of the revenue entitlement rate under Articles 112C and 112D of the Federal Constitution must be completed this year.
The domestic trade and cost of living minister also noted that the increase in Sabah’s revenue entitlement from RM26.7 million annually between 1974 and 2021 to RM600 million a year had already enabled the state government to introduce several new initiatives.
