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Federal govt’s contribution to states for 2014-2018 amounted to RM32.37b

05 Dec 2019 / 18:09 H.

KUALA LUMPUR: The total contribution from the Federal government to the state governments for the 2014 to 2018 period, excluding population grants, amounted to RM32.377 billion, said Finance Minister Lim Guan Eng (pix).

He said in general, the classification of grants from the Federal government to the state governments was in accordance with the Federal Constitution.

“This includes, among others Capitation Grant Per Head, State Roads Grant, Grants Based on Economic, Infrastructure and Wellbeing Status, and Grants under Concurrent List as provided under the Ninth Schedule (Concurrent List) of the Federal Constitution,” he said.

Lim said this when replying to a question from Kasthuriraani Patto (DAP-Batu Kawan) who wanted the Finance Ministry to state the total grants given by the government to all states excluding population grants in the Dewan Rakyat here, today.

Kasthuriraani also asked the ministry to state the total amount of tax revenue collected, directly or indirectly, for each state from 2014 till to-date.

Lim said the tax revenue collection administration for the Federal government involved two departments/agencies, namely the Inland Revenue Board of Malaysia (IRBM) that collects direct tax and the Royal Malaysian Customs Department (RMCD) which collects indirect tax.

According to the Federal Constitution, Part VII Financial Provisions, Article 97 Consolidated Funds paragraph (1); all revenues and monies including tax revenue collected through IRBM and RMCD received by the Federal government must be put in the Federal Consolidated Funds administered by the Accountant General’s Department.

“The total direct and indirect tax revenue collection paid to the IRBM or RMCD at the state level does not describe that the tax revenue is from contributions from real economic activities in that state.

“This is because the state in which the tax collection agency branch is located that received the direct or indirect tax payment most probably is different from the place where the tax payer’s economic activities are carried out or the actual residence of the taxpayer,” he said. — Bernama

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