Penang studying need to have special financial zone

Penang chief minister Chow Kon Yeow said the state government is trying to establish whether a special financial zone would increase business efficiency, spur capital injections and eliminate barriers to trade.

GEORGE TOWN: The Penang government, through the Penang Institute, is looking into the prospect of forming a special financial zone as an engine of growth, the state assembly was told today.

Chief minister Chow Kon Yeow said the study would evaluate the sentiments of Penang government-linked companies and other firms, and identify whether such a zone would increase business efficiency, spur capital injections and eliminate barriers to trade.

“For now, the research is at the discussion stage with the stakeholders. The state will then apply to the federal government to establish this zone,” he said when winding up the address by Penang governor Ahmad Fuzi Abdul Razak today.

On Aug 25, Prime Minister Anwar Ibrahim announced the formation of a special financial zone in Forest City, Johor, as well as several incentives, including multiple entry visas and a special income tax rate of 15% for skilled workers.

Former Penang chief minister Lim Guan Eng then followed up by proposing that the government create a similar zone in Penang, with a focus on the northern region, considering the state’s role as a main manufacturing hub, in addition to contributing RM10 billion in state tax to the federal revenue.

Meanwhile, Chow said Penang is presently the state with the second lowest outstanding loan balance owed to the federal government after Selangor, at RM36.7 million.

As such, he said Penang’s move to take loans from the federal government would hinder the state’s mission of clearing its debts with the federal government.

“However, Penang’s finance department will continue to evaluate this from time to time and propose to the state executive council whether there is a need to obtain further loans from the federal government,” he said.

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