Minister in the Prime Minister's Office and Second Minister of Finance and Second Minister of National Development, Ms. Lanny Ying, said in Parliament on Monday (November 7) that the state enjoys the right to permanent reversionaryinterest, when the state sells land by way of a 99-year land lease, the land remains in state ownership after the lease expires.
The receipts from the sale of land are a financial asset of the state reserve.
The government invests this money, with up to 50% of the long-term net investment return credited to the National Reserve Net Investment Returns Contribution (NIRC) and the rest of the actual return reinvested.
At the end of the lease, the land automatically reverts to the state and becomes part of the accumulated reserve.
Ownership of the land has always been part of the accumulated reserves, and the reversion of the land to state ownership does not increase the national reserves.
The proceeds from the earlier sale of the land were used to compensate the state for the loss of 99 years of land use rights, not to give up the land permanently.
If the government sells the land again, this is the same process as if it were sold for the first time, Inrani said.
The land, a tangible asset, is transformed into a financial asset to compensate the state for the loss of ten land use rights during the land lease period.
The reserve will only increase if the government uses the financial asset as an investment and achieves growth.