KUALA LUMPUR, August 26 — Penang Chief Minister Chow Kon Yeow has called on the Federal Government to review the Federal Constitution to allow a more equitable revenue-sharing model between Putrajaya and the states.
Speaking in the Dewan Rakyat, Chow, who is also MP for Batu Kawan, said states face financial limitations under the current framework as most tax collections are centralised, leaving state governments with insufficient resources to fund development and welfare programmes.
He proposed that the Federal Government consider allocating 20% to 30% of tax revenue back to the states, noting that Penang has consistently contributed significantly to the nation’s GDP despite its limited natural resources.
In response, the Deputy Finance Minister explained that revenue collected by the Federal Government is redistributed to states through annual grants, budget allocations, and federal development projects, including education, healthcare, and transportation initiatives.
For Penang, allocations for 2025 include RM2.5 billion in development projects such as the RM16.82 billion Penang LRT Mutiara Line, the RM1.2 billion Mengkuang Dam expansion, and a RM667 million sewage treatment and piping upgrade in Mak Mandin.
Federal grants for Penang have also increased to RM360 million in 2025 compared to RM352 million in 2024, with road maintenance (MARRIS) receiving the largest share at RM225 million.
