What does Penang propose for state revenue sharing with the federal government?

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Penang Proposes Return of Tax Revenue to States

Penang has put forward a proposal for a revenue-sharing mechanism that would see a portion of tax revenue collected within each state returned to the respective state governments. Specifically, Penang suggests that at least 20 percent of the tax revenue collected in each state should be returned, with a fallback acceptance of 10 percent if the initial figure proves unfeasible.
Rationale for Revenue Sharing

The primary objective behind this proposed revenue-sharing model is to empower state governments with greater financial autonomy. Such a system would enable states to allocate more resources towards crucial developmental initiatives. These include investments in essential infrastructure projects, the enhancement of public transportation networks, the expansion of social welfare programmes, and the implementation of environmental conservation efforts.
Institutional Focus in Federal-State Relations

Discussions surrounding federalism, as highlighted by Penang Chief Minister Chow Kon Yeow, should pivot towards strengthening institutions rather than focusing solely on political parties. The underlying principle is that while political leaders and parties are transient, institutions are designed to endure. This perspective underscores the need for robust and stable mechanisms governing federal-state relations that can withstand changes in political leadership.
Broader Call for Stronger Federal-State Frameworks

The sentiment for a more robust federal-state framework was echoed by leaders from various states at the Inter-State Forum on State-Federal Relations. There is a consensus that Malaysia requires a stronger rules-based system and enhanced constitutional safeguards to ensure that the interests of all states are protected, irrespective of their political affiliations or size. This includes the establishment of clearer mechanisms to govern federal-state relations, thereby mitigating the impact of political shifts on governance and development across the nation.

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What does Penang propose for state revenue sharing with the federal government?

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