GEORGE TOWN: A state government backbencher has voiced concern over Penang’s recent move to reclassify rural areas as urban and implement a revised land tax structure — the first such adjustment in more than three decades.
Bertam assemblyman Datuk Seri Reezal Merican Naina Merican, who acknowledged the rationale behind the policy, cited the state’s efforts to strengthen public service delivery and increase revenue.
However, he warned of its unintended consequences, particularly for low-income groups and long-time residents of traditional villages who now face steep tax hikes.
He said, under the new classification, village residential lots, previously taxed at 22 sen per square metre, would now be taxed as urban residential lots at 70 sen per square metre.
“This amounts to an increase of over 100 per cent in some cases, disproportionately affecting residents who may lack the financial means to absorb such a sudden rise.
“This is a real burden, especially for low-income landowners and elderly residents who have inherited family land through generations,” he said today.
While reaffirming his understanding of the state’s broader fiscal goals, Reezal Merican urged the state government, and the chief minister in particular, to adopt a more people-centric approach in rolling out the changes.
He recommended targetted and tiered rebates for traditional village landowners and those in the B40 income group to ease the immediate financial burden.
“Conduct meaningful dialogue sessions with affected communities, including village representatives and local associations, prior to enforcing the new tax rates.
“Conduct tax simulations to help residents better understand their new obligations,” he added.
Reezal Merican also proposed a reassessment of the newly gazetted urban boundaries to ensure that traditional and rural communities are not automatically reclassified without considering existing infrastructure and socioeconomic conditions.
“Recalibrate land tax rates based on the actual level of local development, rather than relying solely on gazetted urban classifications.
“Villages that have yet to undergo significant urbanisation should not be taxed as fully developed urban areas, he said.
Reezal Merican also expressed confidence that the state government would take these recommendations seriously and strike a fair balance between fiscal sustainability and social equity.
“I believe the government’s humanistic approach, grounded in the real-life struggles of the people, can help reduce the pressure on affected communities, without compromising the state’s long-term financial objectives,” he said.
In recent days, there have been calls for Penang to delay increase in quit rent.
It was reported that Penang would increase quit rent in the state by between 29 per cent and 200 per cent for various land categories from next year.
There would also be a 32.5 per cent discount next year and a 20 per cent discount in 2027 and 2028 to cushion the hike.
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