KUALA LUMPUR (August 11): State governments should be allocated more taxation powers than currently provided under the law, said Terengganu Menteri Besar Datuk Seri Dr Ahmad Samsuri Mokhtar.

Broader taxation would allow states to secure greater revenue than the current framework, under which corporate and personal income taxes are collected solely by the federal government, Ahmad Samsuri (PN-Kemaman) said on Monday’s Dewan Rakyat debate on the 13th Malaysia Plan.

“This ensures that if the political alignment between state and federal governments differs, it does not affect the state’s development or the well-being of its people,” he said.

Ahmad Samsuri did not elaborate about the taxation powers he sought for state governments.

Under Budget 2025, the federal government has raised the allocation for development expenditure to RM1.8 billion for Terengganu from RM1.6 billion in 2024, Prime Minister Datuk Seri Anwar Ibrahim was quoted as saying by Bernama.

In 2023, Terengganu’s total revenue fell 31.9% to RM1.21 billion, according to the Auditor General’s 2024 report on state governments. Tax revenue amounted to RM84.11 million and non-tax revenue RM199.04 million, while non-revenue receipts totalled RM927.14 million.

“The 13MP should also serve as an opportunity to enhance the powers of the states, or to implement decentralisation in certain aspects and to a certain extent, so that states can progress more swiftly without being influenced by partisan political sentiments.

Ahmad Samsuri also proposed the creation of a federal-state special grant under a new law to enable direct funding for priority state projects. He argued that such a mechanism could channel funds "without leakages, bureaucratic hurdles or delays from federal agencies” to the states.

Malaysia should consider moving towards “a model of cooperative and fiscal federalism, where solving the people’s problems takes precedence over constitutional boundaries designed for independence in 1957,” he added.

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