AS the expansion of the Sales and Service Tax (SST) takes effect on July 1, Chief Minister Chow Kon Yeow has renewed calls for the Federal government to implement a revenue-sharing approach that reflects states’ contributions to the national economy.
Speaking to reporters today, Chow was asked a question by a reporter on a recent call by Bukit Tengah assemblyman Gooi Hsiao-Leung, who urged the Federal government to allocate a portion of SST revenue to individual states.
Gooi had proposed a minimal revenue-sharing mechanism based on each state’s contribution to the country’s Gross Domestic Product (GDP).
Chow supported the move made by Gooi to allocate a portion of SST revenue to individual states.
“In fact, I took the lead last year by requesting that 20% of tax revenue collected from Penang be returned to the state, but unfortunately the proposal was not favoured,” he said at a press conference today.
Chow noted that Penang has long been a significant contributor to the national economy, and hoped the revenue-sharing formula could be used.
“While we appreciate the federal government’s allocations for infrastructure projects, the states also need funds for welfare programmes, social development, and other state-driven initiatives.
“If 20% is a lot, why not start with 10%? We understand the federal government may have constraints, but the same applies to the states as well,” Chow added.
He also welcomed efforts to advocate for a more systematic distribution of federal tax revenue to states.
Chow mentioned that Penang is the second highest of the country’s approved manufacturing investment for the first quarter this year, raking in RM6.7 billion after Sabah.
“This is our contribution to the national economy, making semiconductor industry in the state a success,” he said, hoping Putrajaya will acknowledge the state’s contribution and look into request of revenue sharing.
Story by Edmund Lee
Pix by Muhamad Amir Irsyad Omar
Video by Ahmad Adil Muhamad