GEORGE TOWN: Penang deserves a fairer return of federal revenue based on its actual contribution to national development, said Chief Minister Chow Kon Yeow.
Chow stressed that the state is not seeking special treatment, but equitable revenue distribution based on its actual contribution to national development.
"I welcome Prime Minister Datuk Seri Anwar Ibrahim’s clarification in the Dewan Rakyat that Penang is among the states that contribute more tax revenue to the Federal Government than the amount it receives in development expenditure.
"The acknowledgement confirms Penang's role as one of the country's main economic drivers and a net contributor to the overall federal revenue.
"I have repeatedly raised this matter at various national-level meetings and in the Dewan Rakyat as well.
"Penang deserves a fairer return of revenue in line with its contribution to the country's economy.
"What the state government is fighting for is not special treatment but to ensure revenue returns are made fairly, based on the state's actual contribution to the nation's development," he said in a statement on his official Facebook page on Wednesday (July 1).
Chow said that as a state at the forefront of Malaysia's manufacturing, trade, technology and innovation sectors, Penang requires continued investment to strengthen strategic infrastructure and maintain the country's global competitiveness.
"I appreciate the Prime Minister's recognition of Penang's contribution, as well as the Federal Government's for approving and financing several major infrastructure projects in the state since 2023.
"These include the Mutiara Line Light Rail Transit (LRT) project, the expansion of the Penang International Airport (PIA), the Juru–Sungai Dua Traffic Dispersal Project (elevated highway), flood mitigation projects and various other development initiatives.
"These projects will strengthen Penang's position as the country's economic hub,” he said.
He said the move reflected the Madani Government's commitment to transparency, accountability and good governance.
"When policies are based on facts and transparent data, it will increase public confidence and enable national development planning to be carried out objectively and effectively.
"Penang will continue to play its role as one of the country’s engines of economic growth,” he said.
Chow then shared that Penang recorded RM63.96bil in approved investments last year, comprising RM25.10bil in foreign direct investment (FDI) and RM38.85bil in domestic direct investment (DDI).
He said that Penang has maintained its position as Malaysia’s leading exporting state, with exports reaching RM573.91bil in 2025, accounting for 35.7% of the country’s total exports.
"These figures demonstrate that investments channelled into Penang not only boost the state's economy but generate significant returns for the country through higher exports, quality employment opportunities, technology transfer and increased tax revenue for the federal government.
"Our priority is to ensure Penang continues to strengthen as one of the country's economic, industrial, technology and innovation hubs," he said.
Chow then called on the federal government to realise the state’s aspiration of establishing the Penang International Financial Centre (PIFC).
“The establishment of the PIFC will complement Penang’s strengths as a high-tech manufacturing hub by developing the financial and high-value services sectors.
"The initiative has the potential to attract international financial institutions, high-quality investments and global talent while strengthening Malaysia's position as a competitive financial and investment hub in Asia," he said.
Anwar said only Selangor and Penang contributed more in tax revenue than they received in federal spending between 2023 and 2025.
Speaking during Prime Minister's Question Time in the Dewan Rakyat on Tuesday (June 30), Anwar said official figures refuted claims that certain states were being sidelined and that every state had received higher allocations under his administration despite differences in tax contributions.
He said Selangor and Penang's contributions exceeded federal spending due to their strategic economic positions.
"Every state has received higher allocations than before and, in most cases, allocations exceeded the average tax revenue collected, with the exception of Selangor and Penang.
"Selangor and Penang are exceptions because, owing to their strategic economic positions, they generate significantly higher tax revenues, while federal government expenditure in those states is comparatively lower," he said.
