No choice but to rely on land-related income, says Chow

Penang chief minister says this is why the state has been asking the federal government for a better share of revenue.

He said premiums from land disposal, lease extensions, and land-use conversions, as well as direct tax from land ownership, including quit rent and parcel rent, brought in only about RM130 million.

He said the recent land tax review, which was debated at length in the assembly, would add only about RM50 million after reductions, exemptions, rebates, and discounts.

“We do not deny that the disposal of reclaimed land is a major source of income for the Penang government, and if this source runs out, we will face a challenge in replacing it with other sources,” he said during question time.

Chow was responding to a supplementary question from Phee Syn Tze (PH-Sungai Puyu), who asked whether the state was too dependent on land sales and development as its main source of income, and how long this could last.

To the second question, Chow said: “We will last until we cannot last.”

He said this was why Penang and several other states had been asking the federal government to consider giving states a better share of revenue.

He said some states had asked for 20%, 25%, 30%, or 40% of certain revenue to be shared, subject to Putrajaya’s agreement and financial position.

“If the states are developed and financially strong, then the country will be fiscally resilient. If all resources are centralised at the federal level, this situation will continue for all states in Malaysia,” he said.

Chow said Penang was not like Sarawak, which had petroleum resources and the power to impose petroleum sales tax worth billions of ringgit.

And unlike Sabah, Penang could not claim a 40% share of net federal revenue derived from the state, he said.

He said until revenue sharing with Putrajaya became a reality, Penang would still have to depend on traditional sources of income.

Earlier, Chow said the state had taken several steps to raise income, including improving revenue collection and recovering arrears.

He said government-linked companies also helped grow the state economy, although they did not collect taxes directly.

He gave the example of Chief Minister Incorporated, which contributed RM6.41 million to the state in 2024, rising to RM54.2 million in 2025.