GEORGE TOWN: Two business groups have backed a former chief minister’s call for a special financial zone (SFZ) to be set up in Penang, saying it will stem a major brain drain in the state.
The Penang Chinese Chamber of Commerce (PCCC) said a lot of talents cultivated in Penang have been lured to Singapore by better pay and perks, including engineers, accountants and chemists.
PCCC president Hong Yeam Wah said having an SFZ in Penang would give the state a competitive edge and the ability to retain its talents.
“If a SFZ is set up in Penang, it would not only stop our top, specialised talents from leaving, but also spur the local economy,” Hong told FMT.
He believed the effect of an SFZ would be akin to the industrial boom brought by the late chief minister Dr Lim Chong Eu, which made Penang the country’s top manufacturing hub today.
Hong said the SFZ should ideally come with proper incentives so that it would be a growth centre for the northern region of the peninsula, also allowing Penang to gain from lost ground after its duty-free status was axed in the 1970s.
“Tax exemptions alone won’t do what other regional players such as Indonesia, Thailand and even India are doing. Penang has been benefitting from the US-China trade war, with many tech companies setting up shop. A SFZ will further sweeten the deal for these companies.
“SFZs will also attract venture capitalists, and we should provide matching grants. Penang should be a one-stop centre for people to do business with the world,” he said.
Last month, Prime Minister Anwar Ibrahim announced that Forest City in Johor had been designated as an SFZ, with government incentives in store for companies operating there to lower the cost of doing business.
The incentives include a special income tax rate of 15% for skilled workers and the provision of multiple-entry visas.
Bagan MP and former Penang chief minister Lim Guan Eng then proposed that Putrajaya set up an SFZ in Penang, since the state is the country’s top manufacturing hub and contributed RM10 billion in taxes to Putrajaya’s revenue recently.
The Penang chapter of the Malaysia Indian Chamber of Commerce and Industry also supported Lim’s idea, with its president, S Parthiban, saying the state had the right “critical mass” for an SFZ.
“The proposed special tax rate of 15% and multiple-entry visas will go a long way to attract highly skilled workers. It will also address the brain drain of highly talented Malaysians.
“This initiative will definitely drive development and accelerate the growth of the service sector, not only in the northern region, but for the entire country,” he said.