Live updates: Malaysia Budget 2024

Malaysia's Prime Minister and Minister of Finance Anwar Ibrahim is delivering the #Belanjawan2024 speech for the Financial Year 2024 in Parliament today (13 October 2023).

Stay tuned to this page for key updates as unveiled in the Budget, themed 'Malaysia MADANI', and to our daily e-Bulletin for the full post-Budget highlights following the statement. 

Most recent updates will appear on top.  

Updates shared here are not exhaustive.

With the cooperation of the State governments, the following could benefit from an RM10mn allocation:

• Sabah & Sarawak cultural activities
• Preserving minority languages
• Establishing the Ethnic & Cultural Center of Perak
• Renovation of Songket Weaving Center and Wood Carving Village in Terengganu

Separately, there will also be funds allocated to increasing sports and leisure programmes:

• A swimming skills programme for children, the disabled, and elderly from low-income families
• Sports and leisure activities for the elderly
• Family camp programmes
• Special tax exemption for the purchase of sports equipment and activities, limited to RM1,000.

RM12mn will also be allocated to the National Sports Council for training programmes and to prepare athletes for international sports games.

PM Anwar has also shared that RM50mn will be allocated to agencies that have the potential to highlight national works of art and literature, intensify heritage theater performances, and foster an interest in reading masterpieces among the youth. An additional RM50mn will also be allocated to matching grant funds to encourage the organisation of high-performance sports events by sports bodies and the private sector.

Additional jobs/skills related incentives announced:

• All MySTEP appointees will be offered the opportunity to follow a skills improvement programme via MyFutureJobs.
• SOCSO will provide a special incentive of RM1,500 a month for six months, to support the entry of more than 3,000 jobseekers. This will total to RM30mn.
• RM35mn will be allocated to the SOCSO Career Building Programme to fund training fees and income replacement incentives for 9,000 gig workers who attend training.
• RM100mn will be allocated to the Self-Employed Social Security Scheme to encourage the operating companies to bear the remaining 10% of contributions on behalf of their gig workers.

Financing schemes/grants announced:

• Government grants covering subsidies, incentives, and financial assistance to the people, of which close to 50% will be to control the prices of goods and services. These grants will amount to RM58.1bn.
• RM225mn will be dedicated to financing the cost of transportation and distribution of basic necessities to rural and interior areas, and new areas in Abai, Sandakan, Sabah; and Engkerebai, Mukah, Sarawak zones.
• Rahmah cash contribution (STR):
  • RM10bn will be allocated to improving STR, resulting from subsidies retargeting savings that will benefit 9mn people. STR applications will open as early as November 2023, and applications will be open throughout the year instead of once a year as previously.
  • The first payment of up to RM500 is likely to be made in February 2024.
• RM500mn will be allocated to continuing the People's Income Initiative (IPR), and allocations will be made to increase the participation of more poor people in the IPR programme so as to increase their income.

As part of the Visit Malaysia 2026 campaign, PM Anwar has announced:

• The Carter's Flight Matching Grant to increase the accessibility of international flights to Malaysia.
• The Islamic Tourism Center (ITC) to develop a Muslim-friendly tourism industry in Malaysia.
• RM20mn will be allocated to State governments to maintain and conserve tourist attractions.
• RM80mn will be allocated to preserving and conserving buildings and heritage sites that have the potential to be recognised by UNESCO.
• A total allocation of RM20mn will be dedicated to Think City, to raise and preserve the value of Kuala Lumpur as a creative city, starting from Taman Tasik Perdana to Chinatown.
• New initiatives will be introduced under the Malaysian Visa Liberalisation Plan involving facilities such as study passes for strategic investors in key sectors.
• The government has also introduced a Long-term Social Visit Pass for international students who have graduated, to meet the needs of the industry's skilled workforce.
• Visa-on-arrival facilities, social visit passes, and multiple entry visa offers will also be improved to encourage tourists and investors to enter the country, especially those from Eastern, Middle Eastern, Indian, and Chinese countries.

A total of RM6.8bn will be allocated to improving TVET in Malaysia, of which RM10mn will be dedicated to providing industry-recognised professional certification to TVET graduates, and as an incentive for the industry to collaborate with public TVET institutions.

The government will also be allocating RM1.6bn to HRD Corp's retraining and skills improvement programme for small-and-medium enterprises and vulnerable groups.

Additional updates:

• RM70mn will be allocated to the implementation of the Academy in Industry Programme to provide skills to working individuals for a period of up to 18 months.
• RM180mn will be allocated to educational loan facilities for 12,000 trainees who follow the Skills Certification Programme. This includes those pursuing maritime, arts at ASWARA, and aerospace MRO.
• RM17mn will be allocated to the Tahfiz TVET programme, to open up opportunities for Tahfiz students to diversify their skills in addition to continuing their memorisation studies.

The government has extended the period of tax exemption for attending up to 2,000 course fees (for skills improvement or self-improvement) until assessment year 2026.

More allocations announced include:

• RM100mn for digitisation grants of up to RM5,000, to benefit more than 20,000 SME entrepreneurs and micro-entrepreneurs.
• RM900mn to encourage SMEs to increase business productivity through automation and digitisation.
• RM40mn for the implementation of the Shop Malaysia Online programme to encourage small traders, especially in the food sector, to do business from home.
• RM25mn for strengthening the role of the Digital Economy Centres so they can continue to support small entrepreneurs at the community level selling products online.

PM Anwar has also announced a reduction in the period in which companies are allowed to claim capital allowances on the purchase of ICT equipment and computer software packages to three years, instead of four years, from assessment year 2024.

There will be a new high-tech industrial area built in Kerian, North Perak.

A total of RM28mn will be allocated to the development of MYStartup as a single window to facilitate the business activities of start-up companies. Additionally, RM200mn will be allocated as funds under various funding and venture capital agencies for startups.

There will also be RM1.5bn dedicated to funds from GLCs and GLICs, to encourage start-ups, including Bumiputera SME entrepreneurs, to venture into the field of 'high-growth high-capital'.

Apart from the above:

• RM100mn will be allocated to MyCIF for a period of three years, for initiatives related to the environment, society, and the State Islamic Religious Council for the development of Waqf assets. 
• The government will extend tax incentives for individual investors who invest in start-up companies through the ECF platform to individual investors through Limited Liability Partnership nominee companies, and up until 31 December 2026.
• Tax incentives for catalyst investors or angel investors have also been extended to 31December 2026.

Updates on financial assistance, payouts, increases, allocations:

• Rahmah cash contributions will be increased to RM10bn, up from RM8bn in 2023.
• RM55mn will be allocated for a rebate of up to RM40 per month for electricity bills, to more than 142,000 severely poor households. The payment of electricity bill will also be exempted for 120,000 poor households.
• RM2.4bn will be allocated to build, maintain and repair the quarters of civil servants, teachers, hospitals, policemen, soldiers, and firefighters.
• RM18mn will be allocated to:
  • The Bill for Implementation of Alternative Punishment Against Mandatory Death Penalty;
  • Separation of powers of the Attorney General and Public Prosecutor, and
  • Defending the sovereignty of the homeland from Sulu Claims.
• RM38mn will be allocated to:
  • Repair infrastructure;
  •  Upgradecourt ICT facilities; and
  • Strengthen the role of the Malaysian Judicial Academy and the Malaysian Syariah Judicial Academy
• In support of welfare initiatives, the conditions for the use of accumulated funds for business purposes will increase from no more than 25%, to 35%.
• Toilet repairs in 8,354 schools will be fully completed this year, and RM150mn will be allocated to the maintainence and repairing of public toilets in 150 areas nationwide.
• RM5.4bn will be allocated to MARRIS to maintain state roads. At the same time, RM2.8bn is being allocated to Federal road and bridge maintenace, including RM300mn dedicated to G1-G4 contractors.
• The allocations to district engineers will be increased to RM200,000, for the benefit of 115 district JKR throughout Malaysia. This will total RM30mn in allocations.
• Increase the allocation of District Engineers to RM200 thousand for the benefit of 115 District JKR throughout Malaysia.

Further allocations:

• Maintenance of streetlights, including replacing them with LED types that can save electricity up to 60%: RM100mn.
• Maintenance of streetlights, including replacing them with LED types in PBT areas across the country: RM50mn.
• Upgrading of existing traffic lights to 30 units of smart traffic lights on Jalan Persekutuan: RM50mn.
• Allocations are channelled under the Overseas Malaysian People's Trust Fund to defend the fate of people who are victims of job fraud syndicates, as well as other welfare cases abroad: RM10mn.
• Improve the function of NSRC to combat scam crimes: RM20mn.

PM Anwar has also shared:

• The development of the National Fraud Portal (NFP) is expected to be completed by the middle of 2024.
• RM12.4bn will be allocated for the development of Sabah and Sarawak. The government will also increase the rate of Special Grants for Sarawak and Sabah, to RM300mn.
• The GovTech Nucleus Unit has been created to build internal expertise to empower the digitisation of public service delivery.
• A total of RM200mn will be provided to the Industry Development Fund and New Industry Master Plan 2030 (NIMP) Strategic Joint Investment Fund.

According to the PM, Malaysia has the third-highest total petrol subsidy allocation in the world, with its RON95 petrol price ranking as the ninth cheapest globally, what he said is even cheaper than Saudi Arabia.

Malaysia is also the lowest tax collector in ASEAN with just 11.8% to GDP, compared to Singapore (12.6%) and Thailand (16.4%).

Starting next year, several tax reform measures will be implemented to broaden the country's revenue base, but designed so as not to burden the majority of the people, he shared.

Service Tax: The Service Tax rate will be increased from 6% to 8% next year, with the scope expanded to logistics, brokerages, underwriting, and karaoke services. However, the rate of 6% will be maintained for food and beverage services, telecommunications, and car parking.

Capital Gains Tax: The government will enforce the Capital Gains Tax for the disposal of unlisted shares by local companies from 1 March 2024, at a rate of 10% of net profit.

The Government is also considering Capital Gains Tax exemptions on the disposal of approved IPO shares and internal restructuring, subject to stipulated conditions.

High Value Goods Tax: The government will enact a new legislation to implement the High Value Goods Tax at a rate of 5%-10% on certain high value goods such as jewelery and luxury watches, based on the threshold value of the goods.

Apart from the above, PM Anwar has shared that the government is expected to implement a global minimum tax in 2025. This will only apply to companies with a global income of 750mn Euros or more. The government will continue to monitor the development of the global minimum tax at the international level.

Further updates:

• The government has agreed to enforce the mandatory implementation of e-invoicing for taxpayers with annual income or sales exceeding RM100mn from 1 August 2024. This will be enforced in phases for taxpayers in other income categories, with the target of comprehensive implementation from 1 July 2025.
  • The Tax Identification Number (TIN) will be expanded to support the implementation of e-invoicing.
• Dealing with revenue leakage: As the number of illegal cigarettes is still high in the market (56.6% of the local market), inter-agency cooperation will be enhanced. From January 1, 2024, the government will tighten smuggling control measures and expand to liquor products. 
  • The activity of moving ships or transhipment of liquor products will be limited in certain ports only.
  • Bukit Kayu Hitam Immigration, Customs, Quarantine and Security Complex will be used as a single point-of-exit for the northern region.
  • Import activities for cigarettes for the domestic market must be carried out in full container loads.
  • Enforcement agencies that demonstrate continued commitment and outstanding performance will be rewarded accordingly.

The 'MADANI Economy: Empowering the People' framework sets a new direction for the country to meet current and long-term challenges. Budget 2024 is a continuation of the policy tracking this framework, PM Anwar shared.

Malaysia Budget 2024 will be worth RM398.3bn, covering three focus areas:

• First: Best Governance For Service Agility
• Second: Restructuring the Economy to Boost Growth
• Third: Improving People's Living Standards

The estimated national revenue in 2023 is expected to be RM303.2bn, up from the initial projection of RM291.5bn. Looking at 2024, the government expects the country's GDP growth to range between 4-5%, as indicated by "strengthening economic indicators and reforms in the MADANI Economy". The projected fiscal deficit in 2024 is 4.3%, compared to a fiscal deficit of 5% in 2023 and 5.6% in 2022.

Photo: Screenshot of livestream, Parlimen Malaysia YouTube