Penang Studying Prospect Of Forming Special Financial Zone

GEORGE TOWN, May 30 (Bernama) -- The Penang government, through the Penang Institute, is looking into the prospect of forming a Special Financial Zone in the state as an engine of growth, the Penang State Legislative Assembly was told today.

Chief Minister Chow Kon Yeow said the study is evaluating Penang government-linked companies and business sentiments and identifying whether the formation of the 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 the Special Financial Zone,” he said when winding up the address by Penang Governor Tun Ahmad Fuzi Abdul Razak today.

On Aug 25, Prime Minister Datuk Seri 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 per cent 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 the second state with the lowest outstanding loan balance owed to the Federal Government after Selangor, at RM36.73 million.

As such, he said Penang's move to take loans from the Federal Government would hinder the state’s mission of becoming debt-free from the Federal Government soon.

"However, the State 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 loans from the Federal Government,” he said.

-- BERNAMA