Penang opposition leader Jahara Hamid has criticised the state executive councillors’ decision to approve a slight increase in assessment rates for 2015, saying it was done due to the "inefficiency" of the two local councils.

The new rates, announced yesterday by state cabinet member on local government Chow Kon Yeow, are effective Jan 1.

The new rates - an increase between 0.5 and 1 percent for most (about 80 percent) categories does not apply to kampung houses, association and agricultural land.

Jahara said the justification used by the state exco to raise the assessment rates via the two local councils does not tally with its report in the state's official newsletter Buletin Mutiara on Jan 9.

In the report, Chief Minister Lim Guan Eng had reportedly said that the state government will not heed the federal administration's recommendation to raise the assessment rates so as to not burden the people, Jahara said.

"I am of the opinion that the assessment rates had to be increased because the state is not efficient in managing its resources.

"The two local governments have recorded a high amount of uncollected taxes for 2013 - RM21.8 million for the Seberang Perai Municipal Council (MPSJ) and RM54.5 million for the Penang Municipal Council (MPPP).

"These reports are based on the Auditor General's 2013 report on the financial statement for MPPP and MPSP," said Jahara in a statement today.

Jahara said the two local councils should find ways to improve their efficiency as they had failed to collect RM76.3 million in arrears.

She added that the increase in taxes, announced yesterday, was akin to "forcing" those who pay assessment rates to carry the burden of those who failed to pay their taxes.

"Is this a fair manner to treat Penangites who do pay the assessment rates?

"The hike in assessment rates is not only ineffective but the matter will worsen as there is no serious effort to address the source of the problem, which is the inefficiency of the two local councils.

"Penangites must know why RM76.3 percent has yet to be collected? Are the two local councils afraid to act on those who refuse to pay their taxes," she asked.

Jahara urged the state government via the local council to address the issue of thousands of alleged illegal factories within the island and Seberang Perai.

She said the local councils collect extra funds by issuing licenses to these factories without burdening the people by raising assessment rates.

"The local councils have already increased the rental rates by 100 percent for hawkers at the hawker centers (medan selera) and those within the public market areas.

"This was implemented as the local councils said they lack the funds for renovation works of the premises.

"At the same time, the local councils have already collected a large sum of money through parking summons and fines," she quipped.