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Land-based tax capacity and tax effort of the State Governments in Peninsular Malaysia: a Representative Revenue System (RRS) approach

The Auditor General Report 2004 revealed that seven out of 13 states in Malaysia are facing dire financial difficulties to the extent of being qualified as at the verge of bankruptcy. One of the solutions proposed would be to devolve more tax responsibilities to the state governments. However, som...

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Main Author: Ahmad Zafarullah Abdul Jalil,
Format: Article
Language:English
Published: Journal of Faculty of Social Sciences and Humanities. Universiti Kebangsaan Malaysia 2011
Online Access:http://journalarticle.ukm.my/2659/1/zafarullah011.pdf
http://journalarticle.ukm.my/2659/
http://www.ukm.my/e-bangi
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spelling my-ukm.journal.26592016-12-14T06:32:16Z http://journalarticle.ukm.my/2659/ Land-based tax capacity and tax effort of the State Governments in Peninsular Malaysia: a Representative Revenue System (RRS) approach Ahmad Zafarullah Abdul Jalil, The Auditor General Report 2004 revealed that seven out of 13 states in Malaysia are facing dire financial difficulties to the extent of being qualified as at the verge of bankruptcy. One of the solutions proposed would be to devolve more tax responsibilities to the state governments. However, some authors have argued that the Malaysian state governments have not been using their tax base efficiently and the devolution of more tax responsibilities towards them will only result in more inefficiency. It is thus important to gauge the fiscal effort exerted by the state governments before any attempts being made towards increasing tax responsibilities of the state governments. The main objective of this article is to measure the fiscal effort and capacity of the state governments in Peninsular Malaysia. In order to achieve this, we will use the Representative Revenue System (RRS)/ Representative Tax System (RTS) approach. This paper will discuss the preliminary findings of the research using the 2008 data. Our results show that more-developed states tend to have higher index of tax effort compared to the less-developed ones. It is also shown that state governments with high fiscal effort are in a relatively better fiscal position. However, tax arrears do not seem to correlate with the level of tax effort. Journal of Faculty of Social Sciences and Humanities. Universiti Kebangsaan Malaysia 2011 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/2659/1/zafarullah011.pdf Ahmad Zafarullah Abdul Jalil, (2011) Land-based tax capacity and tax effort of the State Governments in Peninsular Malaysia: a Representative Revenue System (RRS) approach. e-BANGI: Jurnal Sains Sosial dan Kemanusiaan, 6 (2). pp. 206-219. ISSN 1823-884x http://www.ukm.my/e-bangi
institution Universiti Kebangsaan Malaysia
building Perpustakaan Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description The Auditor General Report 2004 revealed that seven out of 13 states in Malaysia are facing dire financial difficulties to the extent of being qualified as at the verge of bankruptcy. One of the solutions proposed would be to devolve more tax responsibilities to the state governments. However, some authors have argued that the Malaysian state governments have not been using their tax base efficiently and the devolution of more tax responsibilities towards them will only result in more inefficiency. It is thus important to gauge the fiscal effort exerted by the state governments before any attempts being made towards increasing tax responsibilities of the state governments. The main objective of this article is to measure the fiscal effort and capacity of the state governments in Peninsular Malaysia. In order to achieve this, we will use the Representative Revenue System (RRS)/ Representative Tax System (RTS) approach. This paper will discuss the preliminary findings of the research using the 2008 data. Our results show that more-developed states tend to have higher index of tax effort compared to the less-developed ones. It is also shown that state governments with high fiscal effort are in a relatively better fiscal position. However, tax arrears do not seem to correlate with the level of tax effort.
format Article
author Ahmad Zafarullah Abdul Jalil,
spellingShingle Ahmad Zafarullah Abdul Jalil,
Land-based tax capacity and tax effort of the State Governments in Peninsular Malaysia: a Representative Revenue System (RRS) approach
author_facet Ahmad Zafarullah Abdul Jalil,
author_sort Ahmad Zafarullah Abdul Jalil,
title Land-based tax capacity and tax effort of the State Governments in Peninsular Malaysia: a Representative Revenue System (RRS) approach
title_short Land-based tax capacity and tax effort of the State Governments in Peninsular Malaysia: a Representative Revenue System (RRS) approach
title_full Land-based tax capacity and tax effort of the State Governments in Peninsular Malaysia: a Representative Revenue System (RRS) approach
title_fullStr Land-based tax capacity and tax effort of the State Governments in Peninsular Malaysia: a Representative Revenue System (RRS) approach
title_full_unstemmed Land-based tax capacity and tax effort of the State Governments in Peninsular Malaysia: a Representative Revenue System (RRS) approach
title_sort land-based tax capacity and tax effort of the state governments in peninsular malaysia: a representative revenue system (rrs) approach
publisher Journal of Faculty of Social Sciences and Humanities. Universiti Kebangsaan Malaysia
publishDate 2011
url http://journalarticle.ukm.my/2659/1/zafarullah011.pdf
http://journalarticle.ukm.my/2659/
http://www.ukm.my/e-bangi
_version_ 1643735455681740800
score 13.211869

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