MP calls for Langkawi to have autonomy over taxes

 Langkawi MP Suhaimi Abdullah says this would allow the island to finance its own development projects without waiting for federal allocations.

Langkawi MP Suhaimi Abdullah said the resort island could be empowered to manage local council taxes, land taxes and licences, as well as introduce levies for tourism, hotels, the environment and ferries.

KUALA LUMPUR:

Putrajaya should consider granting Langkawi more fiscal autonomy to manage its taxes and use the revenue for local development, says Suhaimi Abdullah (PN-Langkawi).

He said that while the island had generated billions of ringgit from tourism, a large portion of the tax revenue went into federal coffers, although various levels of government had to bear development and service costs.

Suhaimi suggested a decentralised “Langkawi Fiscal Autonomy Model” based on arrangements in Hong Kong, a special administrative region of China, or in Switzerland where each of the 26 cantons enjoys a high degree of tax autonomy.

“Under this model, Langkawi would collect its own taxes, retain a large portion of the revenue and be responsible for significant spending.

“Meanwhile, the government can still handle federal matters such as defence, national security, immigration, foreign policy and some strategic infrastructure,” said the MP when debating the 2027 budget in the Dewan Rakyat.

Suhaimi said Langkawi could be empowered to manage local council and land taxes, as well as licences, and introduce levies on tourism, hotels and ferries.

He said that with more than 3.2 million visitors recorded in 2025, a moderate levy of RM30 per person could generate nearly RM100 million a year.

“Combined with existing revenue and other tourism-related sources, Langkawi could manage around RM250 million to RM350 million a year to finance sanitation, transport, water supply and tourism development without waiting for federal allocations.”

Separately, Suhaimi said small and medium-sized enterprises (SMEs) operating in Langkawi were calling for a review of the taxes imposed on their products when shipped to the mainland.

He said SME-produced goods such as handicrafts and snacks became more expensive when sold on the mainland because of these taxes.

“Snacks become expensive when sold in Kuala Perlis, even though flour prices on the mainland and the island are the same. Therefore, SMEs are asking for a review of taxes on goods made in Langkawi,” he said. - FMT