Every state has received higher allocations than before
In the long arc of nation-building, few questions cut deeper than who gives and who receives. Standing before Parliament, Prime Minister Anwar Ibrahim presented three years of federal fiscal data to answer that question plainly: only Selangor and Penang have contributed more in taxes than they received in federal spending, while every other Malaysian state has drawn more from the centre than it has given. The figures, he argued, reveal not neglect but redistribution — the quiet, unglamorous work of a federation trying to lift its least prosperous corners.
- Persistent allegations that certain states have been sidelined or shortchanged forced the Prime Minister to defend his government's record on the floor of Parliament.
- The numbers expose a dramatic fiscal asymmetry: Selangor alone generated RM43.6 billion in taxes yet received only RM15 billion back, while Kelantan contributed under RM1 billion and received nearly nine times that in federal spending.
- Poorer states — Kelantan, Kedah, Terengganu, Perlis — are receiving their highest-ever federal allocations, channelled into poverty eradication, school upgrades, and infrastructure, directly contradicting claims of deliberate neglect.
- Anwar called the neglect narrative baseless slander, but the political question lingers: will raw fiscal data quiet the grievances, or will the debate simply migrate to new terrain?
Prime Minister Anwar Ibrahim took to Parliament on Tuesday to put numbers to a debate that has long run on grievance and perception. His argument was straightforward: over the past three years, only Selangor and Penang have paid more into the federal treasury than they received back in government spending. Every other state, he said, has come out ahead — and the data, in his telling, makes the case against claims of regional neglect.
The contrasts are striking. Selangor, Malaysia's economic heartland, averaged RM43.6 billion in annual tax contributions between 2023 and 2025, yet received only RM15 billion in federal expenditure. Penang's RM10.7 billion in tax revenue outpaced the RM7.9 billion spent there. The gap, Anwar explained, reflects the concentration of economic activity in these states rather than any favouritism in their direction.
The picture reverses sharply elsewhere. Kelantan generated less than RM1 billion in taxes but received RM8.9 billion in federal spending. Kedah contributed RM3.7 billion and received RM9.5 billion. Terengganu's tax base — even with petroleum revenue included — fell well short of the RM7.8 billion the federal government spent within its borders. Even Johor, a relatively productive state, received more than it contributed.
Anwar framed the presentation as a rebuttal to what he called slander — the charge that his administration has distributed resources unfairly or ignored certain regions. He pointed to mechanisms like ecological fiscal transfers and expanded capitation grants as evidence of deliberate effort to direct money toward the poorest communities. States like Kedah, Terengganu, and Kelantan, he noted, are receiving their largest-ever federal allocations under his government.
Whether the figures will settle the argument or simply redirect it remains an open question. Data has a way of answering one dispute while opening another.
Prime Minister Anwar Ibrahim stood in Parliament on Tuesday and laid out the numbers that, in his telling, settle a persistent argument about fairness. Only two states—Selangor and Penang—have paid more in taxes to the federal government than they received back in spending over the past three years. Every other state in Malaysia has gotten more money back than it contributed, he said, a fact he offered as proof against claims that certain regions have been neglected or shortchanged.
The disparity is stark when you look at the figures. Selangor, the country's economic engine, generated an average of RM43.6 billion in tax revenue between 2023 and 2025, yet the federal government spent only RM15 billion there during the same period. Penang collected RM10.7 billion in taxes while receiving RM7.9 billion in federal expenditure. The gap exists, Anwar explained, because these two states sit at the center of Malaysia's economic activity and generate outsized tax revenue relative to the services the federal government needs to provide within their borders.
The inverse pattern holds across the poorer states. Kelantan, one of the country's least developed regions, generated just RM946 million in tax revenue but received RM8.9 billion in federal spending. Kedah contributed RM3.7 billion in taxes against RM9.5 billion in federal expenditure. Terengganu's tax revenue totaled RM1.2 billion—or between RM2.2 billion and RM2.4 billion when petroleum revenue is included—yet the federal government spent RM7.8 billion there. Perlis contributed RM419 million in taxes and received RM2.2 billion in spending. Even Johor, despite generating about RM14 billion in tax revenue, received RM16 billion in federal expenditure.
Anwar's presentation was a direct response to allegations that his administration has sidelined certain states or distributed resources inequitably. He framed the data as evidence of the opposite: that every state has received higher allocations under his government than before, and that in most cases, federal spending exceeds what those states contribute in taxes. The government has pursued this through mechanisms like the ecological fiscal transfer and increased capitation grants, he noted, directing money toward poverty eradication, school upgrades, infrastructure projects, and improvements to public amenities in poor and marginalized communities.
The Prime Minister emphasized that states like Kedah, Terengganu, and Kelantan have received their highest-ever allocations under the current administration compared with previous governments. He called the claims of neglect baseless and asked Parliament to move past what he characterized as slander. The numbers, he suggested, speak for themselves. The question now is whether they will settle the debate or simply shift it to new ground.
Citas Notables
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.— Prime Minister Anwar Ibrahim
La Conversación del Hearth Otra perspectiva de la historia
Why does Selangor pay so much more in taxes than it receives back in spending?
Because it's where the money is made. Selangor's economy generates enormous tax revenue—corporate taxes, income taxes, business activity. But the federal government doesn't need to spend proportionally there. The infrastructure is already built, the economy is already functioning. The money flows out, not in.
So the poorer states get the opposite treatment?
Exactly. Kelantan generates less than a billion in taxes but receives nearly nine billion back. That's redistribution by design. The federal government is moving money from where it's earned to where it's needed most.
Is Anwar saying this proves the system is fair?
He's saying it proves the opposite of what critics claim. They say certain states are neglected. He's showing that those same states receive far more in spending than they contribute. It's a numbers argument against a narrative argument.
But doesn't that just describe how redistribution works? Richer regions subsidize poorer ones?
Yes. And that's his point—it's working as intended. But the political claim is that it's not happening, or that it's happening unfairly. He's using data to say: look, redistribution is real, it's substantial, and it's happening more than ever.
What does he want people to take away?
That the government is investing in disadvantaged states, that the gap between tax contribution and federal spending is intentional and growing, and that complaints about neglect don't match the reality of where the money is going.