States to receive more tourism tax revenue, federal funding

2026-03-05 - 10:23

The finance ministry said the national finance council today agreed to expedite the disbursement for all federal allocations under the Concurrent List. (Facebook pic) PETALING JAYA: The national finance council has agreed to increase federal allocations to the state governments, particularly for grants under the Concurrent List, state road maintenance, and the distribution of tourism tax revenues. The finance ministry said federal allocations under the Madani government are expected to reach RM10.5 billion this year, compared to the RM10.3 billion in 2025 and RM8.1 billion in 2022. “In conjunction with Visit Malaysia Year 2026, the federal government will also channel 100% of tourism tax collections directly to the respective states, compared to the current practice of sharing only 50%,” it said in a statement. It added that to improve the sustainability of state governments’ cash flows, the council approved enhancements to the disbursement mechanisms under the Concurrent List. The Concurrent List sets out the responsibilities and matters jointly managed and funded by both the federal and state governments, as per the Third List under the Ninth Schedule to the Federal Constitution. The ministry also said that grants for state road maintenance would be enhanced to include procurement for Bailey bridges, repairs, and the widening of drains and ditches along state roads. “The council also agreed to expedite the disbursement for all (federal) allocations under the Concurrent List,” it said. Prime Minister Anwar Ibrahim, who chaired the council meeting today, said the government is committed to improving federal allocations to all state governments every year for the benefit of all citizens, regardless of state or territory. “As set out in the Madani Economic framework, the country’s wealth must be distributed fairly and based on good governance,” said Anwar, who is also the finance minister. He emphasised that the government remains fully open to close cooperation with all state governments, regardless of political affiliation. “These improved allocations are crucial for accelerating socio-economic development and critical infrastructure so that we can stand and progress together as one nation.”