THE Penang government will present a suggestion to the Federal government to return 20% of taxes collected to each state at the upcoming Special Meeting for all Mentri Besars, Chief Ministers and Premier in July.
Chief Minister Chow Kon Yeow said his request aims to enable the state government to enhance its development efforts.
The Special Meeting is expected to be chaired by Prime Minister Datuk Seri Anwar Ibrahim.
“Firstly, I will bring this suggestion to the Penang executive council (exco) meeting for discussion.
“We will also deliberate on justified allocation to each state or greater autonomy allocated to each state in terms of tax collection.
“If there is consensus, I will then bring this matter to the special meeting for further discussion.
“I hope the Federal Government will consider our request. We aim to see a change in terms of allocation to each state, particularly Penang, given its status as one of the highest tax-collecting states,” Chow (PH-Padang Kota) replied to a supplementary question by Goh Choon Aik (PH-Bukit Tambun) during the Penang Legislative Assembly session today.
Goh had inquired about any plans by the state government to request increased allocation from the Federal Government for various infrastructure projects in the state.
Chow elaborated that there are two ways that the Federal government to consider should it decide to entertain the request from the Penang government, based on recent perspectives shared by constitutional law expert Professor Emeritus Datuk Dr Shad Saleem Faruqi in a local newspaper.
“Firstly, Penang’s proposal for the Federal government to return 20% of tax revenues collected from the state will require a significant constitutional amendment.
“Such an amendment would require buy-in from all the states, considering Malaysia’s absence of a fiscal decentralisation policy.
“Secondly, the Federal government can opt for the easier way, which involves making a policy change on this matter to determine the allocation of tax revenues to each state. However, this will require unanimous agreement from all states.
“I don’t know whether this proposal will be taken seriously or I will be blacklisted.
“I understand that the Federal government also faces financial constraints, particularly given the high national debt.
“As at end-August 2023, the total Federal government debt stood at RM1.15 trillion or 62% of gross domestic product (GDP), remaining below the stipulated debt ceiling of 65% of GDP.
“Nevertheless, I will try my best to present this suggestion for consideration,” he said.
Story by Riadz Akmal
Pix by Muhamad Amir Irsyad Omar