BUDGET 2024 | Prime Minister Anwar Ibrahim, who also helms the finance portfolio, has tabled Budget 2024 in the Dewan Rakyat. This is the second budget under the Pakatan Harapan-BN administration.
Anwar has described this budget as one that attempts to correct Malaysia's course and steer the country towards greater economic heights.
Key highlights
RM2k for government servants and pensioners
More discounts for PTPTN borrowers
Over RM900 million to refurbish dilapidated schools
Childcare tax relief upped to RM3,000
- Sumbangan Tunai Rahmah scheme enhanced and extended
Boosting efforts to combat poaching and illegal logging
Rebates for e-bike purchases
Entertainment tax slashed in Federal Territories
RM44 billion to bolster MSMEs
Tiered tax exemption system for investors
RM20 million to the National Scam Response Centre to combat scammers
More funds for patching potholes, installing LED lights to boost road safety
RM150 million to refurbish school toilets
Poultry subsidies to end once domestic market stabilises
Electricity bill rebates of up to RM40 a month for the poor to continue
Deposit payment exemption for utility accounts.
Capitals gains tax on disposal of unlisted shares by companies
Luxury tax of between five percent to 10 percent will be implemented
Global minimum tax for companies with an annual revenue of €750 million (RM3.7 billion).
7.48PM: This concludes Malaysiakini’s live coverage of Budget 2024. Thank you for following us.
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‘Challenging times ahead’
6.50pm: In his closing remarks, Anwar says his administration is open to criticisms but not slander.
He warns that Malaysia is facing global economic and geopolitical headwinds, which pose an obstacle to the country’s success.
"I urge everyone to return to constructive politics, embrace togetherness to rebuild this country... We are in a strategic position to be an economic leader in Asia that we've always dreamed of.
"I urge everyone to prioritise the future of the country. Unity should be based on courtesy and mutual respect, which will ensure national stability.
"After six decades of independence, now it is time for us to right the wrongs to ensure that every rakyat will value happiness and peace in this country without feeling left out," he says.
The response from the opposition was muted.
RM2k for civil servants, pensioners
6.45pm: Anwar makes note that the government Is reviewing the civil service salary scheme, which was last reviewed in 2012.
While waiting for the review process to be completed, he announces that Putrajaya will be paying RM2,000 to all civil servants who are Grade 56 and below, including those on contract.
Uniformed personnel, pensioners and military personnel not on a pension will receive RM1,000 each.
The payouts will be made in February, which Anwar says could help relieve their burden when the new school term starts.
Tax relief for sporting goods
6.40pm: Good news for sports lovers! Sporting goods and activities will be lumped into a separate tax relief category from next year onwards, with reliefs of up to RM1,000.
Anwar says the tax relief will apply to sports training purposes.
Stamp duty revision for home purchases
6.25pm: Stamp duty for real estate purchases will be fixed at four percent for foreigners and foreign companies in order to control housing prices.
This does not cover locals or permanent residents.
Previously, the system was tiered - with four percent being the highest tier for memorandum of transfers (MOT) involving properties more than RM1 million - and applied to everyone.
For MOT involving beneficiaries based on wills, faraid or the Distribution Act 1958 will only cost RM10, instead of ad-valorem (based on the value of the property) as practised currently.
Making public varsities affordable
6.20pm: Up until March 31 next year, Higher Education Loan Fund (PTPTN) borrowers who repay at least 50 percent of their outstanding loans will be given a 10 percent discount.
A 15 percent discount will be offered to those who opt for a direct debit or salary deduction scheme.
Beginning January, the registration fee for public universities will be capped at RM1,500 in order to match the advance payment from PTPTN.
Students who are unable to pay the registration fees at the commencement of a term will be allowed to do so later.
"I will not deny education for students from poor families just because they cannot afford the registration fee," he says.
Construction of 26 new schools
6.10pm: Construction for 26 new schools will commence next year and will cost taxpayers RM2.6 billion.
Maintenance funding to the tune of RM1.9 billion will be allocated to schools. Of that amount, RM930 million will specifically be for 450 dilapidated schools, nearly two-thirds of which are located in Sabah and Sarawak.
Another RM100 million will be allocated for schools to upgrade their computer labs to enhance the teaching of STEM subjects.
Matching grants for universities have been increased to RM16.3 billion, up from RM15.3 billion.
Based on his dialogues with students, Anwar says he decided to allocate RM250 million to improve wifi access in public universities.
Higher childcare relief, more centres for undocumented migrants’ kids
6pm: The government increases tax relief for childcare to RM3,000 from RM2,400.
Anwar also announces that following the pioneer project called “Baitul Mahabbah Jabatan Imigresen Malaysia” - a centre in Seremban housing children whose parents are in immigration detention centres - three more centres will be set up in Sabah, Sarawak and another in Peninsular Malaysia respectively.
"An immigration detention centre is no place for children," stresses Anwar.
He adds that his government is also considering providing education, work and services access for refugees and asylum seekers who are mostly from Myanmar which is experiencing a civil war.
More cash handouts, grocery subsidies for poor
5.50pm: The Sumbangan Tunai Rahmah (STR) cash handout scheme will be increased between RM500 and RM3,700, up from between RM350 to RM3,100 previously.
The government will also enhance the Sumbangan Asas Rahmah scheme next year.
Introduced this year, the scheme saw 200,000 people receiving RM100 for six months. The money is credited into their MyKad and can be used for groceries.
Due to the overwhelming response, the scheme will be extended to another 12 months involving 700,000 recipients. Applications will start in November.
Malaysia going green
5.40pm: The number of community rangers - the primary enforcement against forest trespass, illegal logging, illegal mining and poaching - will be doubled to 2,000.
These new rangers will be hired among military veterans, former police personnel, the Orang Asli and local communities.
Another RM10 million will be allocated as compensation for human-wildlife conflict.
Tax exemptions will be provided to encourage the private sector to take part in tree-planting activities, verified by the Forest Research Institute (FRIM).
NEM solar scheme extended
5.37pm: Putrajaya wants to extend its Net Energy Metering scheme to Dec 31, 2024 to encourage adoption of solar panels in residential homes.
The current programme ends on Dec 31 this year. Megawatt (MW) quota allocation is also limited.
Anwar says the government is also developing a solar panel buy-back scheme with minimal cost but was short on details.
He also says the government is urging the private sector to offer a "zero capital" model, similar to what was being offered by Gentari to residential homes.
Gentari is wholly owned by Petronas.
Encouraging carbon trading
5.35pm: Putrajaya wants to encourage companies to voluntarily enter the carbon market and will incentivise such measures through tax rebates of up to RM300,000 for companies that invest in measurement, reporting and verification (MRV).
"The cost can be deducted from revenue when selling carbon credits on the Bursa Carbon Exchange (BCX)," says Anwar.
Rebates for e-bikes
5.30pm: To ensure the success of the National Energy Transition Roadmap (NERT), Putrajaya will allocate RM2 billion in funding, while banks are prepared to provide financing up to RM200 billion, to encourage industries to transition towards a low carbon economy.
Putrajaya also wants to develop the electric vehicle industry and encourage domestic adoption.
Hence, those with an annual income of RM120,000 and below will qualify for an RM2,400 rebate for electric bikes.
Anwar says Prasarana Malaysia Bhd will be acquiring 150 electric buses to support the LRT3 project.
The government also intends to extend the tax exemption period for individuals to claim up to RM2,500 for electric vehicle (EV) charging costs by another four years and tax exemption for EV rentals for another two years.
Lower entertainment taxes in Federal Territories
5.25pm: The Federal Territories will slash entertainment taxes next year.
A full exemption will be provided to local performers while all theme parks, family recreation centres and indoor games and simulation centres will see an entertainment tax of five percent being imposed.
Foreign performances will involve a tax of 10 percent, down from 25 percent currently. The same tax rate will be applied for film screenings and sporting events.
Anwar urges other states to adopt similar tax systems and lauded Selangor for leading the way.
So far, the prime minister’s decision on the matter received the best response from MPs.
Loosening visa requirements
5.23pm: Putrajaya will embark on a Malaysian Visa Liberalisation Plan to encourage investments from strategic target countries.
The plan will include long-term social visit passes for international students who have completed their studies to meet the needs of skilled industries.
The visa-on-arrival, social visit and multiple entry visas will be improved to encourage visitors and investors from India and China.
Putrajaya also plans to relax conditions for the “Malaysia My Second Home” programme but Anwar did not divulge details.
Tioman Airport upgrade
5.21pm: Putrajaya will spend RM45 million to upgrade the Tioman airport and increase its landing strip by 1.3km.
Earlier this year, Putrajaya halted plans to build a new airport that would include large-scale land reclamation, which would have caused adverse effects on the marine life that Tioman was famous for.
Currently, only small airplanes can land in Tioman because of the small landing strip next to a hill.
Putrajaya will also spend RM20 million on tourist sites such as Tasik Timah Tasoh in Perlis, Kenong Rimba Park in Pahang and Teluk Kemang Beach in Negeri Sembilan.
Another RM80 million will be allocated to Unesco sites such as Gua Niah in Sarawak, Lembah Bujang in Kedah and Royal Belum in Perak.
Tax exemptions for reskilling
5.20pm: Taxpayers can claim exemptions of up to RM2,000 in tuition fees for reskilling courses for the assessment year up to 2026.
The government will also broaden tax exemption under the "lifestyle" category - to include language courses, photography, sewing and others.
Big on TVET
5.10pm: Buoyed by the success of a pioneer programme for private companies to aid TVET training schemes launched following Budget 2023 in February, Putrajaya will allocate RM100 million next year to incentivise more companies to do the same.
Separately, HRDCorp will be spending RM1.6 billion to offer training opportunities for 1.7 million people.
HRDCorp will also be working on a "Program Latihan Madani" - a reskilling programme for entrepreneurs, ex-convicts, disabled people, senior citizens and pensioners.
Perbadanan Tabung Pembangunan Kemahiran (PTPK) will receive RM180 million in funding to train 12,000 people in TVET skills, of which, RM20 million is specifically for those pursuing a certificate in the maritime, arts and aerospace maintenance, repair and operations industry.
Another RM17 million will be spent on "Program Tahfiz TVET" to encourage tahfiz students to learn new skills.
Loans for MSMEs
5pm: Micro, small and medium industries (MSMEs) will have access to RM44 billion in loans.
RM1.4 billion will be in the form of micro-financing, through Bank Simpanan Nasional.
Tekun will also continue to dish out loans, valued at RM330 million, of which RM30 million is specifically for Indian businesses.
Another RM720 million is for female and young entrepreneurs.
Separately, the Finance Ministry's government guarantee scheme, operated by Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP), will guarantee up to 80 percent of loans for entrepreneurs, especially those in the green economy, technology and halal industry. The financial implications are worth RM20 billion.
Tiered system for tax exemption
4.50pm: As part of the National Industry Master Plan (NIMP), there will be a tiered system for tax exemption for investors.
"Companies will enjoy incentives in proportion to their commitments," says Anwar.
For a start, the tiered system will either involve 70 percent or 100 percent exemptions.
One business set to receive such exemptions are those that will operate in the Pengerang Integrated Petroleum Complex.
A new high-tech industrial area will also be set up in Kerian, Perak.
Putrajaya will allocate RM200 million for start-ups while GLCs will finance up to RM1.5 billion for bumiputera start-ups in areas such as aerospace technology and electronic and electrical industries.
Clamping down on scammers
4.45pm: Anwar says he will double funding for the National Scam Response Centre to RM20 million. He also says the NSRC has done well, handling 49,000 complaints since it was formed and has frozen RM60 million transactions.
Bank Negara Malaysia will also do its part in preventing scams by setting up the National Fraud Portal by the middle of next year.
"With automated fund tracing (technology), we hope this portal will expedite detection, freezing and return of funds," he says.
School toilets, potholes
4.40pm: Anwar says his administration's campaign to clean school toilets will continue, with RM150 million allocated to 150 local authorities for this effort.
He says 8,354 school toilets are about to be fixed this year since the campaign began. Anwar adds that it is unthinkable children are allowed to suffer because of poorly maintained school toilets.
Anwar says billions will also be spent to patch potholes and install LED lights in order to make roads safer, noting that some 6,000 people died from road accidents last year.
Subsidies reduction in phases
4.20pm: Subsidies will cost RM81 billion this year, higher than the RM64 billion budgeted earlier, which Anwar argues mostly benefited the rich and 3.5 million foreigners.
Therefore, the government will rationalise subsidies in phases. Any savings will be channelled to "Sumbangan Tunai Rahmah scheme", which is expected to increase to RM10 billion.
Poultry subsidies will be removed once domestic supply stabilises.
Electricity bill rebates of up to RM40 a month for the poor will continue and the government will exempt deposit payments for utility accounts.
Diesel subsidies are set to go. The logistics industry will still be able to buy subsidised diesel, but not other users. Anwar did not divulge on the mechanics
He says the government is currently subsidising RM1.60 for each litre of diesel, to keep it at RM2.15 per litre for consumers. This has led to widespread smuggling.
Service tax up to 8pct
4.18pm: Anwar says difficult "tax reforms" - one that does not burden the public while increasing government revenue - are necessary to ensure quality of services and aid to the public.
Firstly, the government wants to increase service tax from six percent to eight percent.
This will not involve the food and beverage industry and telecommunications. Affected industries include logistics, brokerage, underwriting and karaoke.
Capital gains tax (CGT) will be applied to the disposal of unlisted shares by companies. The government is considering an exemption if the shares were bought during an IPO, internal restructuring or other conditions.
The government will impose a luxury tax that will be at a rate of between five percent to 10 percent.
The government will introduce a global minimum tax for companies with an annual revenue of €750 million (RM3.7 billion).
Economy improving, but leakages persist
4.05pm: Anwar kicks off his speech with a broad overview of the economy.
He says the country's finances are weighed down by a leakage-prone subsidy system and reliance on food imports.
Putrajaya's collective debt stands at RM1.5 trillion or 82 percent of the GDP while debt servicing charges are at RM46.1 billion (15.2 percent of revenue).
On a positive note, he says, inflation is low, at two percent for the month of August, the lowest in the region while the first half 2023 saw direct investments of RM132.6 billion, 60 percent higher than targeted, where half the amount of GDP growth for 2023 is expected to be four percent.
Lower budget deficit target
4.00pm: Budget 2024 is not much higher than the one tabled by Anwar in February as Putrajaya aims to reign in the budget deficit below five percent of the GDP mark.
Revenue is expected to increase due to better economic conditions and through capital gains tax for disposal of unlisted shares while non-tax revenue is projected to decrease, mainly due to lower dividends from Petronas.
Total budget for 2024: RM393.8 billion
(↑ 3.3 percent, 2022: RM386.1 billion)
Operational expenditure: RM303.8 billion
(↑ 5.1 percent, 2023: RM289.1 billion)
Development expenditure: RM90 billion
(↓ 7.2 percent, 2023: RM97.6 billion [includes RM13.2 billion debt repayments])
Revenue for 2024: RM303.2 billion
(↑ 3 percent, 2023: RM294 billion)
Projected deficit for 2024:
4.3 percent (2023: 5 percent [estimate])
-Mkini
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