The Pakatan Harapan government has agreed to share tourism tax revenues and write off around RM3.8 billion worth of loans owed by various states, according to Prime Minister Dr Mahathir Mohamad.

"Although the tourism tax is meant for the federal government, we have agreed to give back 50% of the tax collected from each state," he said, after chairing second National Financial Council meeting in Putrajaya on May 27 between federal and state governments to discuss financial management.

"The states can use this revenue to promote and market the tourism and maintain the tourism infrastructure in their states," he added.

The prime minister said Putrajaya had also agreed to write off around RM3.8 billion worth of loans taken by states for the supply of clean water to rural areas.

"We will write off the loans taken by the different states for supplying clean water to the rural areas from 2001 onwards.

"This is on the condition that the states complete water asset restructuring by December 31, 2019," said Dr Mahathir.