Re­duce reliance on land, de­vel­op­ment charges for rev­enue, state govts told

The Sun (Malaysia) - - MEDIA & MARKETING -

PE­TAL­ING JAYA: State gov­ern­ments need to di­ver­sify their sources of rev­enue in­stead of re­ly­ing heav­ily on land and de­vel­op­ment charges, which con­trib­utes to high prop­erty prices.

Speak­ing at a panel ses­sion at Re­hda In­sti­tute's Bud­get Com­men­tary 2017 yes­ter­day, Khaz­anah Re­search In­sti­tute di­rec­tor of re­search Dr Suraya Is­mail ( pix) said state gov­ern­ments should have dif­fer­ent sources of in­come in­stead of re­ly­ing on rev­enue from land and re­lated mat­ters as the main in­come.

Real Es­tate and Hous­ing De­vel­op­ers' As­so­ci­a­tion Malaysia (Re­hda) pres­i­dent Datuk Seri FD Iskan­dar con­curred, say­ing that in­creas­ing con­ver­sion pre­mi­ums is not a sus­tain­able way to boost state rev­enue.

“If over 80% of your rev­enue is from land and de­vel­op­ment-re­lated mat­ters, it is not go­ing to be sus­tain­able. Se­lan­gor, be­ing a state right in the mid­dle of ev­ery­thing, you have the port and air­port, you have to be in­no­va­tive and cre­ate more jobs, high-paying jobs. When you have high-paying jobs, you cre­ate a niche for your­self.

“All states must find their own niche, where to find more rev­enue.

“When you keep on charg­ing de­vel­op­ers, there is a thresh­old. Once the de­vel­oper can­not take it, they will pass it on to con­sumers,” he added.

Iskan­dar said land cost is the high­est for prop­erty de­vel­op­ers, fol­lowed by con­struc­tion cost, labour cost and com­pli­ance cost.

On Mon­day, Se­lan­gor Men­tri Be­sar Datuk Seri Azmin Ali an­nounced a fore­cast of RM2.55 bil­lion rev­enue for the state next year, of which 81.7% is ex­pected to come from land and de­vel­op­ment-re­lated mat­ters.

Re­hda vice-pres­i­dent Datuk Wan Hashimi Al­bakri W.A.A. Jaf­fri said state gov­ern­ments must have the will to change their rev­enue struc­ture.

“Putting col­lab­o­ra­tion aside, the state must be more in­no­va­tive in gen­er­at­ing rev­enue,” he added.

Cur­rently, Wan Hashimi said, prop­erty de­vel­op­ers have no choice as the charges are im­posed by state gov­ern­ments although some de­vel­op­ers try to ne­go­ti­ate for lower charges. - by Eva Yeong

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