GEORGE TOWN, May 30 ― Penang Chief Minister Chow Kon Yeow hopes to discuss his suggestion that the federal government return a certain percentage of taxes collected from each state at the meeting of chief ministers and menteri besar in July.

Chow told the state legislative assembly that he will first discuss his proposal at the state exco meeting and once it’s approved, he will bring it up at the meeting of chief ministers and menteri besar in July.

Chow said Malaysia does not have fiscal decentralisation so there were no provisions in the Federal Constitution for the federal government to share the revenue collected from each state.

Chow said the prime minister can also make a decision on a policy change to share revenue with each state and this will benefit all states, not only Penang.

"While we want to see a change in the sharing of revenue with the federal government, we also pity the federal government as they have implemented various tax exemptions to attract foreign direct investors that bring in trillions of ringgit worth of investments,” he said when replying to a question at the state legislative assembly here.

"The federal government is also facing financial challenges so I am not sure if my suggestion will be considered seriously or if I will be blacklisted,” he added.

He said he had attended the National Finance Council meeting and that the country has debts that run up to trillions and almost 60 per cent of the country’s GDP.

"This is the situation of the country’s finances, we have to accept this,” he said.

Yesterday, Chow suggested that the federal government return 20 per cent of the taxes it collected from the state as the Inland Revenue Board collects about RM8 billion in taxes from Penang each year.

On the state’s finances, Chow said Penang’s financial situation is stable where it recorded revenue totaling RM258.72 million as compared to expenditures amounting RM235.19 million as of April 30 this year.

"Therefore, there is a surplus of RM23.53 million,” he said.

However, he said that based on the state budget approved last November, the state projected a deficit of RM514.52 million.

He said this is due to the state’s commitment towards the people’s welfare as about 60 per cent of the state expenditure involved the payments for i-Sejahtera programme, public transportation and projects for the public.

"Therefore, the state has implemented a strategy to reduce the deficit budget for 2024 through internal measures and savings in expenditures without affecting projects that have an impact on the people,” he said.