Kluang MP Liew Chin Tong suggested today that state governments be given bigger roles in growing their respective economies and, by extension, that of the country.
The chairman of think-tank Research for Social Advancement (Refsa) said state governments should receive a share of federal income and corporate tax revenue, which will then give them bigger budgets and an incentive to grow the economy.
“At the moment, there is no interest for the state government to grow their economy because they have no share in revenue… They don’t share income tax, they don’t share corporate tax,” Liew said in Refsa’s forum on Budget 2017 here.
“What is the main income source for state governments? It is mainly from extractive industry… Moving forward, we should think about sharing income and corporate taxes with the state government.”
Liew said this will give the state governments room to manoeuvre with a bigger budget, and increase their interest in promoting growth.
“When there is growth, the state government will get more income taxes,” he explained.