Granting Langkawi tax autonomy unwise, economist warns

Carmelo Ferlito, an economist, has advised against granting Langkawi autonomy over taxation, citing concerns that such a move could set a problematic precedent. If one state is allowed independent tax powers, other states may follow suit with comparable demands, potentially destabilizing the country's tax structure, he said. The warning comes amid ongoing discussions about special economic arrangements for the popular island destination in Kedah. Ferlito's concerns reflect broader anxieties about maintaining fiscal coherence across Malaysia's 13 states and three federal territories, where different tax regimes could complicate business operations and create competitive imbalances. Economists and policymakers have long debated the merits of granting individual states greater fiscal autonomy, with proponents arguing it could boost regional development while critics contend it risks fragmenting the national economy. The debate over Langkawi's status is likely to intensify as stakeholders weigh the potential benefits of special economic privileges against the risks of undermining federal revenue systems and triggering similar requests from other states seeking preferential treatment.