The Demise of the Revenue Farm System in the Federated Malay States

Within the space of a few years a remarkable transformation took place in the taxation system of the Federated Malay States (FMS). Up until the early 1900s the British administration of these states relied, as had the sultans and chiefs from whom the British had taken control in the 1870s, on the revenue farm system for collecting many taxes. Most revenue farms were constituted according to the standard pattern found elsewhere in Southeast Asia at this time and in Europe up to the eighteenth century. The government granted a private contractor, the revenue farmer, the exclusive right to collect a certain tax in a specified area for a set number of years in return for a fixed rent, and the farmer kept for himself any money which he collected over and above what he owed the government in rent. A great variety of taxes were collected in this way. There were farms to collect the export duty on atap, firewood, timber, and rattan; most towns had market farms; and in Perak there was even a ‘farm of river turtle eggs’.