What’s in the 2024 budget

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FREE MALAYSIA TODAY. 13TH OCTOBER: Among the highlights are rationalised subsidies for diesel and RM10 billion for Rahmah cash aid programme.

Prime minister and finance minister Anwar Ibrahim has tabled the 2024 federal government budget, with a total allocation of RM393.8 billion.

This represents a RM5.8 billion increase compared to the RM388 billion that was allocated for 2023.

Operational expenditure accounts for RM303.6 billion or 77%, with RM90.1 billion allocated for development expenditure.

Here are the highlights of the 2024 budget:

Economy and investments

  • GLCs and GLICs to allocate RM1.5 billion to support startups involved in high growth, high value areas.
  • RM100 million for Malaysia Co-Investment Fund scheme (MyCIF) over three years to support initiatives related to the environment, society, food security and the state Islamic religious councils.
  • RM20 million to support research in innovation of Islamic economy.
  • RM30 million to draw investments from video game companies.
  • RM28 million to set up MYStartup as a one-stop centre to support startups.
  • RM10 million for MyCC and domestic trade and cost of living ministry to fight profiteering.

Development and utilities

  • RM2.8 billion to repair federal roads and bridges.
  • RM2.47 billion to build people’s housing projects.
  • RM2.4 billion for the construction and maintenance of government quarters.
  • RM1.63 billion to build and upgrade roads in rural areas in Kelantan, Perlis, and Negeri Sembilan.
  • RM1.1 billion to resolve water supply issues in Kelantan, Sabah and Labuan.
  • RM939 million to supply water to 5,150 homes and electricity to 2,200 homes.
  • RM150 million to maintain and repair public toilets nationwide.
  • RM50 million in matching grants to maintain Port Klang roads.
  • RM30 million for district engineers for minor repairs and maintenance of federal roads. Each engineer will be allocated RM200,000.
  • RM20 million for 150 local councils to maintain and repair drainage.

Subsidies

  • Diesel subsidy to be rationalised in phases.
  • RM55 million for electricity subsidies of up to RM40 a month for the hardcore poor.
  • Government to continue rationalising electricity subsidies.
  • Targeted subsidies will be implemented in stages, with savings going towards a bigger allocation for Rahmah cash aid. The allocation for this initiative will be increased from RM8 billion to RM10 billion.

Taxes

  • Service tax to be increased from 6% to 8%. This will not apply to the food and beverage as well as telecommunication industry.
  • Putrajaya will enact a law to facilitate the collection of a 5% to 10% luxury tax. It will not apply to foreign tourists.
  • 10% capital gains tax to be introduced from March 1. This applies to the sale of shares for non-listed local companies.
  • The government is mulling a capital gains tax on profits from specific stock market activities, including IPOs.
  • Government expects to implement a global minimum tax in 2025, on companies with a global income of at least 750 million euros.
    Mandatory use of e-invoice for taxpayers with annual income or sales over RM100 million from Aug 1, 2024.
  • Government to improve stamp duty collection, strengthen tax administration, widen social protection coverage, and restructure development financial institutions (DFIs).
  • Tax incentives to attract investments in the form of tiered investment tax allowances of either 70% or 100%.
  • Special tax incentives for investments in Pengerang Integrated Petroleum Complex (PIPC).
  • Tax incentives for those investing in startups and angel investors until Dec 31, 2026.
  • Tax incentives for women who return to the workforce extended to Dec 31, 2027.
  • Tax exemption for those involved in Islamic securities selling and buying.
  • Five-year tax exemption for Labuan companies involved in Islamic finance.
  • The RM2,000 tax break for upskilling courses extended until 2026.
  • This incentive now also covers language, photography and sewing courses.
  • Government to offer an income tax rate of up to 10% for film production companies, foreign actors, and crew who film in Malaysia.
  • Government to increase income tax exemption ceiling from RM2,400 to RM3,000 for childcare allowances.
  • 4% stamp duty for property transfers by non-citizens and foreign firms. This doesn’t include permanent residents.

Education

  • RM58.7 billion for the education ministry.
  • RM1.9 billion to upgrade schools.
  • RM2.5 billion to build 26 new schools in Sabah, Sarawak, Pahang, Perak and Kelantan.
  • RM180 million to construct 18 new special education blocks in schools in Kedah, Penang and Perlis.
  • RM150 million to expand aid for poor students up to Form 3, compared to up to Form 1 previously. This will benefit one million students.
  • RM100 million to upgrade and maintain computer labs in schools.
  • RM100 million for students who dropped out of school amid pandemic.
  • RM82 million to build 26 new pre-schools under the education ministry in Sarawak, Pahang, Melaka.
  • RM30 million to provide disabled students with special devices and facilities.

Higher education

  • RM16.3 billion for higher education.
  • RM250 million to improve WiFi access in all public varsities.
  • RM300 million to improve infrastructure in local universities.
  • RM5 million to support 5,000 students to access life-long learning programmes in community colleges.
  • RM20 million to set up the country’s first AI facility in Universiti Teknologi Malaysia.
  • Government to give between 10% to 15% discount on PTPTN loans.
  • Entrance fees for public varsities capped at RM1,500.
  • Students who cannot afford to pay their tuition fees will not be barred from registering for courses.

Health

  • Health ministry allocated RM41.2 billion.
  • RM5.5 billion allocated for medicines and vaccines.
  • Over RM1 billion to build new development projects in various hospitals in Johor, Kelantan, and Selangor.
  • Government will support Sarawak’s plans to develop its own cancer institute.
  • RM766 million to replace medical equipment which are deemed “beyond economic repair”.
  • RM300 million to repair 400 dilapidated health clinics.
  • RM200 million to outsource treatment to private hospitals.
  • RM150 million to maintain IT systems under the health ministry, including the Clinic Management System Subscription (CCMS) at 100 government health clinics.
  • RM130 million for health screenings and vaccinations for pregnant women.
  • RM100 million to expand Madani medical scheme nationwide, to benefit 700,000 people.
  • Government increases sugar tax from 40 sen a liter to 50 sen a liter.
  • Government to impose 5% excise duty on chewing tobacco.

Security

  • RM19 billion for the home ministry.
  • RM20 million set up a single border agency.
  • An additional RM10 million to help Malaysians who fall victim to overseas syndicates.
  • An additional RM10 million to support the National Scam Response Centre.
  • Bank Negara Malaysia to develop a national fraud portal by mid-2024.
  • More security assets to be deployed at maritime borders.
  • Government to strengthen measures to combat smuggling of contraband.

Defence

  • RM19.7 billion for the defence ministry.
  • Government to start procurement process for 12 new military helicopters, 60 armoured vehicles, 50 light tactical vehicles, six hovercrafts, 733 support vehicles, seven light police aircraft, and five police helicopters.
  • RM400 million to maintain and repair family homes of servicemen.
  • RM20 million to upgrade the sewerage system in army camps in phases.

Environment

  • Financial institutions to allocate RM200 billion in loans to support industries to reduce carbon emissions.
  • Tax cuts for entities that sponsor tree planting or hold environmental preservation projects.
  • Up to RM1 billion sukuk issuance to support reforestation.
  • RM10 million to those who suffer financial losses caused by wild animals.
  • RM60 million to increase the number of community rangers to protect permanent forest reserves against loggers and poachers.
  • RM200 million for the Ecological Fiscal Transfer for Biodiversity Conservation.
  • Up to RM300,000 in tax cuts for companies spending on measurement, reporting and verification of carbon projects.
  • RM563 million to rehabilitate over 2,000 high-risk slopes nationwide.

Social welfare

  • RM10 billion for Rahmah cash aid programme. This will benefit nine million people, or 60% of Malaysian adults.
  • The maximum Rahmah aid is increased from RM3,100 to RM3,700, while the minimum amount for youths has been increased from RM350 to RM500.
  • Government to expand Sumbangan Asas Rahmah programme by crediting RM100 each month for a year to 700,000 Rahmah aid recipients.
  • RM2.4 billion for the welfare department. This will benefit 450,000 people, including the hardcore poor, elderly, children and the disabled.
  • RM1.2 billion in various aid for the disabled.
  • RM1 billion to ensure welfare of the elderly.
  • Eligibility for welfare aid has been revised in line with the new poverty line of RM1,198 a month.
  • RM500 million for the expansion of the IPR programme.
  • RM200 million to continue the Payung Rahmah programme.
  • RM100 million for Amanah Ikhtiar Malaysia to eradicate poverty.
  • RM100 million to support NGOs helping the rakyat.
  • RM10 million for a second chance programme for ex-convicts.
  • Allowances for disabled trainers raised to RM300 from RM150.
    Proceeds from sale of special number plates will be channeled to the less fortunate. This includes test fees for motorcycle, e-hailing and taxis.
  • A new EPF account known as the “Flexible Account” will be introduced. This new account can be accessed by contributors at anytime.
  • RM50 million for a social security scheme for housewives. This will benefit 400,000 women registered under e-Kasih.
  • 35,000 children to benefit from the expansion of the Biasiswa Kecil Persekutuan programme, to include households earning less than RM2,589 a month.
  • RM1,000 in incentives for pensioners, including veterans without pensions. This will be paid in February

Jobs and community support

  • RM6.8 billion for TVET.
  • RM1 billion for the Madani community development programme for grants of up to RM100,000 for community initiatives.
  • RM586 million for the community development department (Kemas).
  • RM100 million to support TVET certification.
  • RM180 million in TVET study loans. This will benefit 12,000 people.
  • RM100 million for Chinese New Villages.
  • RM100 million for cooperatives through the Cooperative Commission of Malaysia.
  • HRD Corp to use 15% of levies collected for retraining and reskilling of entrepreneurs, ex-convicts, the disabled, senior citizens and retirees.
  • RM70 million for the Academy in Industry programme to support skills training.
  • RM50 million for registered non-Muslim houses of worship.
  • RM35 million for training and income replacement incentive for 9,000 gig workers.
  • RM30 million in incentives for companies to train locals.
  • RM31 million for 10 new tabika and taskas in Terengganu, Negeri Sembilan and Johor.
  • RM20 million to upgrade Kemas pre-school premises.
  • RM20 million for Rukun Tetangga.
  • RM20 million in grants for local communities to organise volunteering, unity, and crime prevention programmes.
  • Socso to provide special incentive of RM1,500 a month for six months to support over 3,300 job seekers. RM30 million is allocated for this initiative.
  • Government to introduce Madani Foster Village programme, which will involve GLCs, GLICs and the private sector.
  • Salary ceiling to qualify for occupational hazard scheme increased from RM4,000 to RM6,000.

Rural communities

  • RM26 million for social initiatives for those in rural areas. This includes mobile health and dental clinic services as well as mobile court services.
  • RM333 million for Orang Asli. This includes entrepreneurship and replanting programmes.
  • RM96 million to support shuttle bus services in rural areas.

Civil Service

  • Review of civil servants salary scheme will be finalised by the end of 2024.
  • In the meantime, RM2,000 in preliminary incentives to be distributed to civil servants Grade 56 and below, including contract workers.
  • Uniformed personnel to receive RM1,000.
  • RM1,000 in incentives for pensioners, including veterans. This will be paid in February.

Transport

  • Prasarana to spend RM600 million to procure 150 electric buses and three new bus depots to support LRT3.
  • RM209 million to subsidise rural air transport in Sabah and Sarawak.
  • RM150 million for bus transformation programme.
  • RM134 million to install 60,000 streetlamps and maintain over 500,000 streetlamps at rural roads.
  • RM100 million to change streetlamp bulbs to LED bulbs.
  • RM50 million for local councils to switch to LED streetlamps.
  • RM50 million to install smart traffic lights at congestion and accident-prone areas.
  • RM47 million to improve passenger facilities and extend the runway at the Tioman airport.
  • RM20 million in matching grants to upgrade the Malaysia Maritime Single Window (MMSW).
  • RM2,400 in rebates for those earning less than RM120,000 a year who purchase electric motorcycles.
  • Government to extend RM2,500 tax exemption for EV charging expenses.
  • 100,000 child helmets to be distributed to poor families.
  • RM4.7 billion to resume the construction of 5 LRT3 stations that were previously cancelled, namely the Tropicana, Raja Muda, Temasya, Bukit Raja and Bandar Botanic stations.

Commodities

  • Government to expand tax incentives for automation to cover the commodities sector.
  • RM2.4 billion for Felda, Felcra and Risda.
  • RM400 million to increase rubber production incentive from RM2.70 per kg to RM3 per kg.
  • RM100 million for palm oil replanting. This will benefit 7,000 smallholders.
  • RM90 million for Risda and Felcra to encourage settlers to optimise land use.
  • RM70 million to support palm oil industry sustainability programmes.

Industries and businesses

  • Miti and MIDA to improve ease of doing business.
  • RM200 million to catalyse the New Industrial Master Plan (NIMP) 2030. 10% of future investments under NIMP will also be utilised for this purpose.
  • Government to develop a high-tech industrial park in Kerian, Perak.
  • RM1.6 billion in loans and guarantees for Bumiputera entrepreneurs.
  • Bumiputera investment institutions will be centralised under Yayasan Pelaburan Bumiputera.
  • RM25 million in matching grant to produce more entrepreneurs under the i-TEKAD initiative.
  • RM10 million to support franchises with export markets.
  • RM40 million to support the Shop Malaysia Online programme.
  • RM27 million to support the Buy Malaysian campaign.

SMEs and micro businesses

  • RM44 billion in loan and financing facilities for micro SMEs. This includes RM1.4 billion for micro loans from BSN, RM330 million in loans from Tekun Nasional, RM720 million for women and youth entrepreneurs and RM30 million for Indian businesses.
  • RM20 billion for Syarikat Jaminan Pembiayaan Perniagaan Berhad to guarantee loans for SMEs involved in green economy, technology and halal sectors.
  • RM900 million for loans from BNM to help SMEs digitalise and automate.
  • RM110 million to upgrade hawker centres and public markets across the nation.
  • RM100 million to support digitalisation efforts of 20,000 SMEs.
  • RM50 million to develop 4,000 new trading spaces. These traders will be given six months free rent.
  • RM10 million to upgrade 10,000 food stalls and warungs nationwide.

Agriculture and food security

  • The price ceiling for eggs and chicken will be lifted.
  • Government to increase floor price of padi to RM1,300 per metric tonne to support farmers.
  • RM3 billion for pilot project to increase padi harvest in Perak, Perlis and Kedah.
  • RM2.6 billion in subsidies and incentives for fishermen and padi farmers.
  • Agrobank to provide up to RM430 million in loans to support the productivity of farmers.
  • RM400 million to support food security programmes.
  • RM50 million in subsidies to increase padi production in hillsides.
  • RM50 million seed fund for padi farmers under Skim Takaful Tanaman Padi. This will benefit over 240,000 farmers.
  • RM50 million to compensate farmers and fishermen affected by natural disasters.
  • RM10 million to build new homes for fishermen.

Tourism

  • The next Visit Malaysia Year has been set for 2026. The government is targeting 26.1 million tourist arrivals.
  • RM350 million to support efforts to promote Malaysia as a top tourism destination. This includes the Visit Malaysia 2026 campaign, aid for cultural performances, matching grants for charter flights and to support Islamic tourism.
  • RM20 million to upgrade and maintain selected tourism sports including those in Perlis, Pahang and Negeri Sembilan.

Arts and culture

  • RM160 million to support the creative industry. This includes funds to support local films.
  • RM80 million for the conservation and preservation of UNESCO heritage sites, including those in Sarawak, Kedah and Perak.
  • RM50 million for government agencies to promote arts and culture.
  • RM20 million for Think City to preserve Kuala Lumpur’s cultural heritage.
  • RM10 million to support cultural activities in Sabah, Sarawak, Perak, and Terengganu.
  • 10% reduction in entertainment duties for international acts.
  • 5% reduction in entertainment duties for theme parks.
  • Local artistes will not be subject to entertainment duties.
  • Government to revise entertainment duties in Federal Territories.

Youth and sports

  • Government to expand bankruptcy scheme to support youths with debts of less than RM200,000.
  • RM20 million for Rakan Muda programme.
  • RM500 reward for youths who volunteer with bodies recognised by Putrajaya.
  • RM72 million to improve ecosystem for elite athletes. This includes RM20 million for the Road to Gold Olympic programme.
  • RM12 million for the National Sports Council to support training of athletes.
  • Up to RM1,000 tax exemption for purchase of sporting goods. This is extended to training fees.

Sabah and Sarawak

  • RM5.8 billion for Sarawak and RM6.6 billion for Sabah.
  • The government is negotiating the handing over of the Bintulu Port and operation of the rural air space to Sabah and Sarawak.
  • Government to support the implementation of a hybrid solar energy project in southern Sabah.

Disaster management

  • RM11.8 billion for 33 flood mitigation projects in Pahang, Selangor, Negeri Sembilan, Sabah, Sarawak, Kedah and Kelantan.
  • RM300 million for NADMA to prepare for floods.
  • RM200 million to build nine permanent relief centres and to repair facilities at 1,500 temporary relief centres.

Islamic affairs

  • RM1.9 million for Islamic affairs. This includes RM220 million to build two new Islamic education institutions in Kuala Lumpur and Negeri Sembilan.
  • RM500 million in loans for those looking to develop wakaf lands nationwide.
  • RM17 million for tahfiz TVET programme.
  • Government restores RM20,000 aid for all Sekolah Agama Rakyat registered under Jakim. This was ceased in 2003.
  • Faster halal certification process, from 51 days to 30 days.

Laws and legal reforms

  • RM38 million to upgrade courts and train more judges.
  • RM18 million for legal reforms.
  • Government Procurement Act to be tabled next year.
  • Amendments to the Drug Dependants (Treatment and Rehabilitation) Act 1983.
  • Government to introduce a visa liberalisation plan, including easing employment pass approvals for strategic investors in primary sectors.
  • Putrajaya will also introduce an extended social visit pass for foreign students who have completed their studies, to boost supply of skilled workers.
  • Visa-on-arrival processes will be eased while multiple entry visas will be offered to tourists and investors from India, China and the Middle East.
  • Relaxation of Malaysia My Second Home (MM2H) programme.

Others

  • RM10 billion for housing credit guarantee, to benefit 40,000 borrowers.
  • RM546 million for maintenance of 36 PPRs.
  • RM2 billion to support National Energy Transition Roadmap (NETR).
  • RM510 million for R&D under the science, technology and innovation as well as higher education ministries.
  • RM76 million to support the R&D ecosystem.
  • RM60 million to develop 5G cybersecurity framework and local expertise.
  • RM5 million to improve facilities for fire and rescue department, police and customs department’s K9 units.
  • Government to set up STEM special task force.
  • RM10 million in humanitarian aid for Palestine.