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The Penang lawmaker told the state legislative assembly that the state collected revenue of RM467.56 million in 2020, which was 90.06 per cent of the estimated revenue for 2020 of RM519.16 million. — Picture by Sayuti Zainudin
The Penang lawmaker told the state legislative assembly that the state collected revenue of RM467.56 million in 2020, which was 90.06 per cent of the estimated revenue for 2020 of RM519.16 million. — Picture by Sayuti Zainudin

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GEORGE TOWN, Sept 2 — The Penang government will be collecting less revenue in 2021 due to the Covid-19 pandemic but among the strategies to be implemented to increase the state’s revenue was to sell state lands and transfer some of its dormant lands to its development arm, Penang Development Corporation (PDC), said chief minister Chow Kon Yeow.

The Penang lawmaker told the state legislative assembly that the state collected revenue of RM467.56 million in 2020, which was 90.06 per cent of the estimated revenue for 2020 of RM519.16 million.

“For 2021, as of June 30, the total revenue collected is RM386.9 million which is 76.46 per cent of the estimated revenue for 2021 of RM506.02 million,” he said in his winding-up speech today.

He said the revenue for 2021 could not be collected in full due to exemptions approved by the state in the wake of the Covid-19 pandemic.

Due to this, he said the state has to implement four main strategies to counter the reduction in revenue.

“The first strategy is to sell state land through an open tender process in which the land will be sold to the highest bidder with certain conditions to maximise the returns for the sale and bring the highest profit to the state,” he said.

Previously, state lands were sold directly to certain applicants by charging a premium rate in accordance with the market price of the land.

In the second strategy, industrial land belonging to the state that has remained dormant will be transferred to PDC.

“The mechanism we can consider is for these industrial lands to be transferred to PDC so that the state can get returns in terms of quit rent from the land bank,” he said.

The third strategy is to reclassify the rural lands to urban lands in developed areas such as Bayan Baru and Bukit Mertajam.

Chow stressed that this reclassification does not involve villages or rural areas but only areas which have been developed and are no longer considered rural areas such as Bayan Baru.

“If we do not reclassify these lands, it would not be fair to other areas such as Bayan Baru is classified as a rural land while Bayan Lepas is urban land but we can see the development in Bayan Baru is more than Bayan Lepas,” he said.

He said with this reclassification, ratepayers in the rural land will be paying urban land quit rent rates which have not increased for over 26 years since 1994.

The final strategy is to convert lands of unclear ownership into interim register (IR) lands which will benefit the state in the form of adding to the state’s land bank which can be disposed of eventually.

“There are tens of thousands of land which have not been converted to land ownership titles based on the National Land Code 1965,” he said.

Out of the thousands of land, he said a portion of it were of unclear ownership where the owners could not be determined.

“We expect the process of converting the land to IR land will take between three to five years depending on the individual IR land issue,” he said.

Other than these strategies, Chow said the state will also continue to monitor its revenue collection and investment activities.

He said the state will also increase the collection of arrears that totalled RM93.59 million as of June 2021.

He added that Penang will also apply to Putrajaya to increase allocations to the state since the state is the highest contributor of foreign direct investments in the country.

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