By Danial Dzulkifly
SHAH ALAM, Feb 7 — The Selangor administration is contemplating proposing that a portion of the corporate tax paid to the Federal government by entities based here be redirected to the state, said Menteri Besar Dato’ Seri Amirudin Shari.
He emphasised the importance of exploring additional income streams for the state, particularly considering Selangor’s significant contribution to the national economy, which stood at 25.5 per cent in 2022.
However, he acknowledged that convincing Putrajaya to accept such a proposal might be an arduous task, given its current financial constraints.
“Considering the current financial situation at the federal level, I don’t believe they are keen about allocating a portion of corporate tax to the state. But this could be one of the suggestions we propose to the Federal government to provide additional revenue to the state.
“We have also received a few million ringgit from the Federal government through the tourism tax, but it varies. Sometimes they allocate 50 per cent (of taxes paid), other times they provide different forms of allocation.
“However, we hope for a more efficient implementation of the tourism tax in the future. Tourism activities happen in the state, yet the revenue flows to the Federal government, including from the use of highways and air travel in and out of the state,” he said.
Amirudin said this in a press conference following an Anti-Corruption Programme and corruption-free pledge (IBR) ceremony at the state administrative headquarters, here, today.
Previously, when debating the 12th Malaysia Plan mid-term review in the Dewan Rakyat last September, Amirudin had stressed the need for Putrajaya to empower state and local governments over matters such as public transportation and healthcare to help diversify the respective administration’s revenue streams.
The Gombak MP emphasised the need for states to reduce their dependence on income generated through land ownership transfers, reminding the Federal government of its shared responsibility, as articulated in the Federal Constitution.
He had suggested then allocating a portion of income tax and road tax to state and local governments as a new source of revenue.
Meanwhile, Amirudin cleared the air over confusions pertaining to the assessment tax exemption for eligible village homeowners in Selangor, stating that they need only to apply with their respective local councils if they meet all the criterias.
He said the state government’s decision to now adopt targeted subsidies is more effective in assisting those truly in need, compared to the ineffective and unsustainable blanket subsidy implemented in the past.
“Under the state government’s framework, we have provided tax exemptions to all houses falling under the low-cost category. These houses have been exempted from taxes as of today.
“However, we have found that some localities and property owners in villages have diverse assets. For instance, one household occupied by a couple may own five other rental houses.”
“These constitute business activities, and they actually have the financial ability to pay the assessment taxes. Nonetheless, we also allow the opportunity for those who feel they are eligible for exemption, like tenants, to apply,” he said.
Amirudin added that village houses not within the jurisdiction of local authorities will remain exempted from paying assessment tax, including those located in Sabak Bernam, Kuala Selangor, parts of Hulu Langat, Kuala Langat, Hulu Selangor, and Gombak.
On February 2, state executive councillor for local government Dato’ Ng Suee Lim had said that the assessment tax exemption for village homeowners will no longer be done in a blanket manner to ensure only those truly in need benefit from the initiative.
Last year, the state spent RM11.55 million to help close to 100,000 village homeowners throughout Selangor by providing exemptions on their assessment taxes.
In total, Ng said 745,790 units have benefited from this initiative since its implementation, with an overall allocation of RM91.5 million by the state government.
