PENANG and other states like Selangor have often been categorised as developed states by the Federal Government.
Chief Minister Chow Kon Yeow said that the Federal Government often had the perception that Penang is a developed state and therefore does not need any assistance or grant from the Federal Government.
“They fail to see that these ‘developed states’ are among the biggest contributors to the Federal Government.
“How are we (the developed states) supposed to intensify our development without the much-needed support from the Federal Government, and yet, to be one of the biggest contributors in the country?
“The states like Penang also needs grants and funds for development.
“Sometimes, we would be glad if at least a loan from the Federal Government could be given to implement a certain project. Sadly, we are in a situation now that even a loan may also not be approved,” Chow said in the webinar, organised by WISDOM Foundation, on Feb 9.
The webinar entitled ‘Income tax revenue for states too: Can Malaysia learn from Indonesia?’ was conducted via Zoom from 8pm to 9.30pm.
Chow said that most of the tax revenues were collected by the Federal Government.
“These include the taxes on income, oil and gas, customs, excise, banking, visa, foreign exchange and others.
“The Federal Government has a great control over tax collection in this country, while the states have limited capacity to raise funds.
“The Federal Government may at times discourages loans or issuance of bonds, hence, affecting the development projects of the states.
“Such arrangement forces the states to be extra dependent on the Federal Government for development funds, and in turn, the Federal has control over the states,” Chow said.
Chow cited an example where the current Federal Government withdrew its support for Penang to obtain a loan to finance part of the Penang Transport Master Plan (PTMP) projects.
“The state governments have limited capacity; hence, they will find ways under their control to obtain the necessary funds for development.
“We have seen other states which have resorted to allowing logging activities to be held just to get funds and taxes. Such activities will impact the environment,” he said.
Chow said the Penang government welcomed the private sector to jointly develop the state.
“We invite more private companies to roll out infrastructure projects in Penang. Be part of our journey in making Penang more sustainable and liveable,” Chow said.
Also present were Selangor executive council member Datuk Teng Chang Khim, Institute for Democracy and Economic Affairs (IDEAS) chief executive officer Tricia Yeoh and IDEAS manager (public finance unit) Sri Murniati. The webinar was moderated by WISDOM Foundation executive chairman Datuk Seri Panglima Wilfred Madius Tangau.
Story by Riadz Akmal
Pix by Law Suun Ting
Video by Chan Kok Kuan