As GST bites, Penang to pay assessment rates for low, medium-cost home owners for 2016

Penang Chief Minister Lim Guan Eng says the state government has estimated its 2016 revenue to rise again for the seven straight years, to about RM687.4 million or RM30.47 million more than last year. ― File pic
Penang Chief Minister Lim Guan Eng says the state government has estimated its 2016 revenue to rise again for the seven straight years, to about RM687.4 million or RM30.47 million more than last year. ― File pic

KUALA LUMPUR, Nov 6 ― The DAP-led Penang government announced today it will spare the owners of low- and medium-cost homes on the island state from paying the twice-year assessment rates for next year.

In his Budget 2016 speech at the state legislative assembly, Penang Chief Minister Lim Guan Eng said the exemption was to provide financial relief to the low and middle-income groups after the Barisan Nasional (BN) federal government introduced the controversial Goods and Services Tax (GST) nationwide on April 1 this year.

“As a government centred on the people, the State Government realises the financial burdens following the implementation of the GST on 1 April 2015.

“The State Government directs the Penang City Council (MBPP) and the Seberang Perai City Council (MPSP) to bear the GST burden for the year 2016 amounting to RM19.36 million that will not be paid by the people but by MBPP and MPSP,” the Ayer Keroh assemblyman said.

A copy of his Budget speech was emailed to media outside the north island state.

Lim said he estimated the relief measure to cost the state some RM11.49 million next year.

However, earlier in his speech he said the state government has estimated its 2016 revenue to rise again for the seven straight years, to about RM687.4 million or RM30.47 million more than last year.

As such, he voiced confidence that the state will be able to cover the assessment payments on for the low- and medium-cost home dwellers.

Houses in land-strapped Penang is among the highest in the country and residents have voiced concern over rising living costs after being slapped with the compulsory GST since April.

Last year, Bank Negara Malaysia governor Tan Seri Dr Zeti Akhtar Aziz said prices are expected to go up temporarily as a result of GST, but also said the inflation rate expected to stabilise to around 3 per cent in 2016.

For this year, Putrajaya is targeting a collection of RM23.2 billion through the GST, with the net revenue to be RM690 million after accounting for RM4.9 billion in aid directed back to Malaysians, RM2.3 billion in tax-exempted items and RM13.8 billion in lost revenue with the sales and services tax system’s abolishment.

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