How is federal revenue increase shared with states?

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Federal Revenue Increase is Shared with States Based on Revenue Growth

Federal revenue increases are distributed to state governments under a revenue-sharing principle, contingent upon an increase in the federal government's collected revenue compared to the preceding year. This distribution mechanism is formally governed by the Akta Pemberian Pertambahan Hasil 1977 and its 2007 amendment.
Annual Allocation for Revenue Distribution

Typically, the Ministry of Finance (MoF) allocates RM250 million annually for distribution to all states. This allocation is released after the Accountant-General's Department verifies an increase in the federal government's yearly revenue and reviews Gross Domestic Product (GDP) data provided by the Economic Planning Unit (EPU).
Legal Framework for Revenue Sharing

The process for distributing increased federal revenue to the states is mandated by specific legislation. These include the Akta Pemberian Pertambahan Hasil 1977, also known as the Revenue Growths Distribution Act 2007, and the Akta Pemberian Pertambahan Hasil (Pindaan) 2007, the Revenue Growths Distribution (Amendment) Act 2007.
Principle of Revenue Sharing

The core principle guiding this distribution is revenue sharing. When the federal government's revenue for a given financial year shows an increase over the previous year, the states are entitled to receive a portion of this growth. This means even a minimal increase in federal revenue, as little as one ringgit, triggers the distribution of the RM250 million allocation to the states.

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How is federal revenue increase shared with states?

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