GEORGE TOWN: Penang is urging the establishment of a national-level special commission to review the revenue-sharing model between the Federal Government and the state.
Chief Minister Chow Kon Yeow said the move was an urgent necessity to ensure fiscal justice and long-term sustainable development.
He said the call for at least 20 per cent of federal tax revenue collected from Penang to be returned to the state had been raised repeatedly in the Dewan Rakyat, including during debates on the federal 2026 Budget.
He, however, said the state government’s official memorandum — prepared for presentation at the 147th Meeting of Menteris Besar and Chief Ministers on Oct 7 — was not accepted for consideration for unspecified reasons.
“Therefore, setting up a special commission is the best mechanism to reassess the existing formula transparently and based on clear agreements, not only for Penang but for fairness across all states,” he told the state legislative assembly sitting here today.
Chow (DAP – Padang Kota) was responding to a question from Goh Choon Aik (PKR – Bukit Tambun) regarding updates on Penang’s demand for 20 per cent of tax revenue collected from the state.
In June, Chow renewed calls for the federal government to consider returning a portion of tax revenue collected from the state, reiterating his administration’s longstanding demand for 20 per cent of federal tax receipts to use for state development.
He said Penang continued to be among the top contributors to Malaysia’s national coffers, yet had been “shortchanged” when it came to federal allocations.
(Hyperlink: https://www.nst.com.my/news/nation/2025/06/1234795/penang-cm-renews-call-federal-tax-revenue-sharing)
Despite the polemics over revenue sharing, Penang continues to maintain its momentum as an economic powerhouse, supported by strong investment and export figures for 2024 and 2025.
Citing Malaysian Investment Development Authority (MIDA) data, Chow said Penang recorded RM17.3 billion in manufacturing investments in 2024, while as of June this year, investments had reached RM12.5 billion.
“Exports via Penang’s two main gateways also reflect the strength of its high-tech industrial ecosystem.
“According to the Department of Statistics Malaysia (DOSM), Penang Port recorded RM60.8 billion in exports in 2024, while Penang International Airport (PIA) posted a far higher RM411.1 billion, driven by the electrical and electronics (E&E) sector,” he said.
For January to August this year, he added, exports via the port totalled RM37.0 billion, while PIA remained the main contributor with RM310.9 billion — reinforcing Penang’s reputation as the country’s leading E&E hub.
“To strengthen high-tech talent development, the federal government has also channelled RM50 million over five years for the Penang Silicon Design @5KM+ (PSD@5KM+) initiative under InvestPenang.
“The allocation was announced by the Prime Minister on Dec 7 last year, followed by disbursements of RM3.6 million on Dec 11, 2024, and RM8 million on March 19, 2025, to ensure smooth implementation and capacity-building for the state’s skilled workforce.
“Although Penang remains a key driver of national exports and investments, reforming the revenue-sharing model remains a critical need,” he said.
The state, often called the “Silicon of the East,” is Malaysia’s major hub for semiconductors, electronic components, and high-tech manufacturing.
It hosts factories for global firms including Intel, AMD, Dell, and Bosch, forming a strong E&E ecosystem.
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