By The Borneo Post onSabah
Rahimah
KOTA KINABALU (April 17): Bersatu Sabah is calling on the Sabah State Government to implement an assertive policy mandating all companies operating within the state — but not paying federal taxes and duties in Sabah, including Petronas, Petron, Shell, offshore oil producers, and plantation companies — to submit audited annual financial statements.
This should be a compulsory condition for the renewal of their trading licences. Additionally, all federal departments, agencies and government-linked companies (GLCs) operating in Sabah must declare their monthly revenue collections.
“To ensure this policy carries legal weight, the Trade Licensing Ordinance must be amended to make the submission of audited financial reports a statutory requirement. Companies failing to comply should face strict penalties, including suspension of their trading licences and prohibition from operating in Sabah,” said Bersatu Sabah Wanita chief Rahimah Majid.
She emphasised that such a policy would empower the State Government to independently track and verify actual revenue collection — reducing reliance on federal data and eliminating the risk of manipulation or underreporting, particularly concerning the longstanding issue of the 40% net revenue entitlement still owed to Sabah.
Rahimah was responding to a recent disclosure by Assistant Finance Minister Datuk Julita Mojungki, who revealed that despite 13 formal requests, the Federal Government has yet to provide data on revenue collected from Sabah.
“This persistent lack of transparency seriously hampers the State Government’s ability to determine the actual federal revenue derived from Sabah,” Julita said in reply to questions from Moyog assemblyman Datuk Darell Leiking and Sekong assemblyman Alias Sani.
Rahimah noted that the Federal Government’s inaction significantly undermines Sabah’s right to validate its fair revenue share — estimated to be worth billions annually — under the Malaysia Agreement 1963 (MA63) and Article 112C of the Federal Constitution.
“It is time for the Sabah Government to take firm, proactive steps to safeguard the State’s financial rights. Knowing exactly how much the Federal Government earns from Sabah — and recovering the 40% net revenue that is due — will enable the State to implement long-overdue development projects and improve the wellbeing of all Sabahans,” she said.
In a statement issued today, Rahimah also proposed the creation of a Joint Audit Committee with the inclusion of an independent third-party auditor to ensure transparency in auditing federal revenue collections originating from Sabah.
She stressed that Sabah has long disputed discrepancies in federal revenues derived from income tax, petroleum income tax, customs and excise duties, Petronas earnings, and collections by federal bodies and GLCs — especially when such payments are made outside Sabah, in Peninsular Malaysia or Sarawak.
“An independent audit would provide verified data on production volumes, profits, and tax payments — allowing the State to accurately assess whether it is receiving its rightful 40% revenue share under MA63 and the Constitution,” she added.
Rahimah, a practising lawyer, is confident that the proposed licensing requirement would create a legal avenue for the State to obtain direct financial data from companies, without needing to rely on federal intermediaries.
“Sarawak has already taken control of its oil and gas resources through its state-owned company Petros and has enforced strict licensing conditions. Sabah can and should follow suit,” she said.
She affirmed that this move is not only reasonable but absolutely essential. It marks a critical step in asserting Sabah’s constitutional and legal rights. Specifically, it would:
Establish a framework for transparency and enforceable accountability for all entities extracting and profiting from Sabah’s natural resources;
Empower the State Government with independently verified data to determine the full extent of federal revenue generated within Sabah;
Strengthen Sabah’s legal and financial standing in negotiations with the Federal Government to ensure compliance with MA63 and the Constitution;
Reaffirm the State Government’s commitment to Sabah’s economic sovereignty, build public confidence through firm and transparent governance, and enable much-needed development and welfare initiatives for all Sabahans and Malaysians in the State.
In addition to this policy proposal, Rahimah also outlined several complementary measures to reinforce financial transparency and defend Sabah’s fiscal rights:
Establish a dedicated State Revenue Monitoring Unit (SRMU) under the Ministry of Finance, tasked with collecting, reviewing and analysing comprehensive financial data from all licensed entities operating in Sabah but remitting taxes elsewhere;
Impose statutory disclosure obligations on all federal departments, agencies, GLCs, and major contractors in Sabah to declare their tax contributions and payments to the Federal Government — ensuring full accountability for revenue derived from the State;
Appoint independent financial auditors and legal experts to conduct regular audits, monitor compliance, and detect any revenue leakages or underreporting — ensuring the State is equipped with accurate, verified data.
“Sabah cannot continue to operate in the dark regarding the wealth generated from its own land, resources and people. The Federal Government’s failure to respond is unacceptable. It is now imperative for the State Government to activate all available legal and administrative channels to demand transparency and secure what rightfully belongs to Sabah,” Rahimah urged.
She called on all Sabahans, civil society organisations, elected representatives, and stakeholders to support this policy initiative and ensure the State Government acts swiftly, decisively, and with unwavering clarity on this crucial matter.
