The national consultative committee on political financing has proposed that the spending limit imposed on parties and candidates be scrapped.
This is among 32 recommendations the committee proposed in its political financing report, which was made public today.
"Limits on party or candidate spending should be removed.
"With the higher emphasis on transparency and accountability, there should be no cap on spending by political parties and politicians, including during campaigns," Minister in the Prime Minister's Department Paul Low, who heads the committee, announced.
The committee also recommended that there should be no cap on the amount that can be donated to any party or politician.
"Successful political parties and politicians are likely to be able to raise more money.
"The effort to create a level playing field should not include steps to bring everybody down to the lowest common denominator," Low told reporters in Kuala Lumpur.
He added that donations to political parties should also be tax deductible.
"This will encourage greater civil participation, create a sense of citizen-ownership of the political parties, and it will also encourage transparency because the donors are incentivised to demand for disclosure in order for them to enjoy the tax benefits," he said.
Low said the committee is also proposing for state funding to support the effective operation of service centres by MPs and state assemblypersons.
He added that the committee is also recommending that all expenditures be recorded and the accounts be audited and reported to the Office of the Controller of Political Donations and Expenditure.
The office will be the regulatory body for political financing and will be overseen by a board comprising credible and trusted figures with no political affiliation.
A new law, the Political Donations and Expenditure Act, will also have to be legislated, in order to govern all aspects of political donation and its administration.
However, the implementation on the rules for disclosure will be gradual and full implementation is targeted for the 15th general election.
"This is an acknowledgement to the fact that some donors may fear retribution and this may negatively impact the legitimate incomes of political parties and politcians if disclosure is enforced without proper preparation.
"For the 14th general election, the disclosure of the donations will be done to the controller," he said.