GEORGE TOWN – Penang Chief Minister Chow Kon Yeow has reiterated his call for Putrajaya to commit to proportionately sharing tax revenues with Penang, based on the state’s contributions to the country’s gross domestic product (GDP).
This follows a recommendation by a backbencher for the federal government to share revenue from the sales and services tax (SST) with the states.
Chow said he had previously proposed that 20% of tax revenue collected from Penang be returned to the state to fund various development projects and programmes. However, the proposal was rejected by the federal government.
Chow, who is also Padang Kota assemblyman, said it is timely for Putrajaya to revisit the proposal, especially with the SST expansion coming into effect on July 1, and "not just push it aside".
He stressed that Penang needs more allocation to support state projects and social welfare initiatives. While the state welcomes federal projects, the federal government should also consider revenue sharing.
“If not 20%, why don’t we start with 10%? We understand the federal position that 20% may be burdensome,” Chow said at a press conference in Komtar.
“But also try to understand the constraint every state faces in securing sufficient revenue – even as we support the federal government.
“We don’t run a state in isolation, but within the context of Malaysia. We contributed the second-highest investment towards the National Semiconductor Strategy (NSS).
“So maybe it is an appropriate time for the federal government to acknowledge our contribution, and look seriously into our request for revenue sharing.”
Chow was responding to Bukit Tengah assemblyman Gooi Hsiao Leung’s recent call for Putrajaya to guarantee a minimum share of SST revenue for the states, based on each state’s contribution to national GDP.
Gooi said this would help address the limited fiscal autonomy currently faced by states.
He has long argued that Penang should be fairly compensated for its outsized contribution to the national economy through a transparent revenue-sharing model that reflects economic output.
Gooi, who chairs the state select committee on state-federal relations, also proposed forming an interstate working group comprising like-minded states to pave the way for a minimum revenue-sharing formula between federal and state governments.
Chow acknowledged that other states share similar sentiments but have yet to raise the matter collectively with Putrajaya.
“But I will probably take up (Gooi’s) suggestion to lobby other menteri besars and chief ministers to look into this matter seriously.”
Q1 investment figures strong, but concerns linger over US tariffs
Separately, Chow said Penang secured RM6.7 billion in approved manufacturing investments in the first quarter (Q1) of this year, accounting for 22% of Malaysia’s total.
This places Penang second behind Sabah, which recorded RM7.3 billion in the same period.
Foreign direct investments (FDI) made up 90% of Penang’s total, with 79% channelled into the electrical and electronics (E&E) sector.
The Q1 investment value marks a sharp 294.1% increase compared to RM1.7 billion in the same period last year.
However, Chow expressed concern over the outlook for the coming quarters in light of anticipated US reciprocal tariffs.
Even so, he remains optimistic, saying InvestPenang – the state investment promotion agency – has informed him that both local and multinational firms remain keen on investing or reinvesting in Penang.
Chow also said InvestPenang will be reaching out to semiconductor giant Intel this week or next to inquire about its plans, following news in April that the company intends to lay off 20% of its global workforce.
This comes despite Intel’s ongoing investment in a new production facility in Bayan Lepas, which is nearing completion.
“It is in our interest to know their plans moving forward for the facility they have built,” he added. – June 23, 2025
The post If not 20%, at least 10%: Chow reiterates call for Putrajaya to share tax revenues appeared first on Scoop.
