SHAH ALAM, Jan 28 — Menteri Besar Dato’ Seri Amirudin Shari has renewed his call for the federal government to redirect a portion of its corporate tax revenue to the states, starting at a modest rate of around 5 per cent.
The Gombak MP told the Dewan Rakyat that stronger fiscal federalism is needed to ensure long-term financial sustainability and infrastructure development in each state.
He said Selangor cannot rely on land-based revenue indefinitely, as land is finite and overdependence could undermine the state’s ability to maintain its infrastructure and deliver essential services.
“I propose that the federal government, especially the Finance Ministry (MOF), prioritise fiscal federalism by sharing corporate income tax with the states.
“We do not need to start with a high rate. A starting point of around 5 per cent would suffice,” he said when debating the Royal address in Parliament today.
With the MOF projecting corporate income tax revenue at RM97 billion, Amirudin said a 5 per cent allocation, or about RM4.85 billion, distributed based on the number and proportion of companies registered in each state could help spur economic activity, especially among small and medium enterprises (SMEs).
This is the second time Amirudin has proposed this in Parliament. In March 2024, he called on the federal government to redirect 5 per cent of corporate tax revenue to the states to help develop SMEs.
In 2024, he said the amount should be allocated based on each state’s contribution to industry growth.
In his speech today, he explained that fiscal federalism would complement Putrajaya’s ongoing governance reforms and strengthen federal-state relations.
“I believe ongoing reforms implemented with full commitment by the Prime Minister (Datuk Seri Anwar Ibrahim) and the Madani Government now should continue, including by strengthening the value of federalism, one aspect of which (channelling corporate tax proceeds to states) was the proposal I mentioned earlier,” Amirudin added.
