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Budget 2024: Key highlights and list of incentives

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Minister of Finance Datuk Seri Anwar Ibrahim tabled the much-anticipated Budget 2024 (Belanjawan 2024) in parliament, today at 4 pm. This is the second budget tabled by the Pakatan Harapan Alliance government. Take a look at the financial and property incentives announced under Budget 2023.

With the theme “Economic Reformation, People Empowerment”, Budget 2024 focuses on three broad themes – Best Governance for Service Agility, Restructuring the Economy to Accelerate Growth and Improving People’s Living Standards.

Budget 2024 Allocations

  • Budget 2023 is revised upward to RM393.8 billion from the previous RM388.1 billion billion.
  • The budget allocation constitutes 19.9% of Malaysia’s gross domestic product (GDP), with three ministries – Finance, Education and Health being the main recipients.
  • Out of the total allocation for Budget 2024, RM303.8 billion (77.1%) will be channelled to operating expenditure (OE) while the remaining RM90 billion will be allocated to development expenditure (DE) with RM2 billion in contingency savings.

2024 Economic outlook and fiscal targets

  • Malaysia’s economy is to grow by 4-5 % next year, led by the services sector.
  • The inflation rate in 2024 is forecasted to hover between 2.1 – 3.6%.
  • Gross exports are set to grow by 5.1% in 2024, and imports by 4.9%.
  • Unemployment rate in 2024 to return to pre-pandemic level of 3.4%
  • Domestic demand forecast to expand 5.3% in 2024

Budget 2024 Highlights

Here are the list of key incentives and exemptions announced under Budget 2024:

Housing

  • The government will ease the current conditions for Malaysia My Second Home (MM2H) applications to boost the arrival of foreign tourists and investors into Malaysia.
  • RM23.37 billion was spent as of August 2024 to restore 256 sick projects, encompassing over 28,000 housing units.
  • The allocation for the Housing Credit Guarantee Scheme (HCGS) will be increased to RM10 billion (from the previous RM5 billion). This is set to benefit 40,000 borrowers.
  • RM2.47 billion allocated for housing projects in 2024. Out of this:
    – RM546 million will be used to continue development of 36 People Housing Programme (PPRs), including a new project in Kluang, Johor. 15 PPRs are anticipated to be completed in the coming year, benefiting 5,100 potential residents.
    RM1 billion under a special guarantee fund will be set up to encourage reputable developers to revitalise abandoned projects, identified by KPKT.
  • Government to take over the previously cancelled Bandar Malaysia Project. The land will be best utilised for the rakyat, where some redevelopment plans include providing affordable housing projects for veterans and the provision of parks and green spaces that can be used by all Klang Valley residents.
  • RM385 million for the continued construction of 14 Rumah Mesra Raykat housing projects, involving 3,500 housing units.
  • RM100 million for the maintenance of low and medium-cost strata housing (both public and private). This will cover repairs to water tanks, roofs, wiring systems, and the installation of closed-circuit cameras.
  • The government will drop the requirement for en-bloc sales to have 100% approval from existing strata title holders, similar to what is being done in Singapore. This will encourage the redevelopment of older properties in urban areas.
  • A flat rate of 4% stamp duty on the Memorandum of Transfer (MOT) will be implemented for non-citizens and foreign-owned companies (not including permanent residents). This will help control property prices for Malaysians.
  • The government will provide funds up to RM500 million (for easy loans) to increase the redevelopment of waqf lands throughout the country. Earlier this year, it ws mentioned that only 12% of waqf lands have been developed so far.
  • A total of RM100mil allocated to Chinese villages to upgrade infrastructure and social facilities.
  • RM460 million for building new homes or housing repair works involving roughly 65,000 underprivileged individuals in rural areas.
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© imran kadir photography | Getty Images

Cash Aid

  • Electricity bill rebates of up to RM40 per month will be provided to extremely poor households with an allocation of RM55 million.
  • Rahmah Cash Aid (STR) will be increased from RM3,100 to RM3,700 – Nine million recipients are set to benefit from this. The first STR payment will be increased to RM500 and will be channelled to recipients before Ramadan.
  • The minimum STR cash aid for youths is also increased from RM350 to RM500.
  • Under Sumbangan Asas Rahmah (SARA) the government has increased the number of recipients from 200,000 to 700,000, where each recipient will receive RM100 each month for a year. With SARA, recipients only need to go to participating retail stores to buy basic groceries just by using their myKad.

Tax

  • The application period for income tax exemption for social enterprises is extended until 2025.
  • Reinvestment tax incentives will be provided on a tiered basis in the form of investment tax allowances of 70% or 100%.
  • The government is considering the exemption of Capital Gains Tax on the disposal of shares related to certain activities such as approved Initial Public Offering (IPO), internal structuring and venture capital companies. This will be subject to set conditions.
  • The implementation of Capital Gains Tax for the disposal of unlisted shares by local companies based on net profit at a rate of 10% will be enforced from 1 March 2024 onwards.
  • The government proposes to exempt income tax on income arising from Islamic Securities Selling and Buying (ISSB) from the assessment year 2024.
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© hbf970103 | 123rf

Transportation and Infrastructure

  • RM4.7 billion to construct five LRT 3 stations at Tropicana, Raja Muda, Temasya, Bukit Raja and Bandar Botanic. These stations were previously shelved.
  • To support the LRT 3 project, Prasarana Malaysia Berhad will acquire 150 electric buses and build 3 bus depots at a cost of RM 600 million.
  • The Penang – Seberang Perai LRT as planned by the State Government will cost roughly RM10 billion, and will be developed via public-private partnership (PPP).
  • A total of RM100 million is allocated for the maintenance of streetlights, including replacement with energy-efficient LED types that can save electricity.
  • RM2.8 billion will be allocated for the maintenance of federal roads and bridges. RM300 million will be specifically earmarked for contractors in G1 to G4 categories.
  • RM150 million is allocated to maintain and repair public toilets in 150 local councils across the country.
  • RM2.4 billion ringgit will be allocated for the construction, maintenance and improvement of government employee quarters, teacher accommodations, hospitals, police, military and firefighter facilities.

Finance and Loans

  • Bank Negara Malaysia (BNM), in collaboration with the financial sector, is developing the National Fraud Portal (NFP), which is expected to be completed by mid-2024.
  • Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) has guaranteed over 100,000 small and medium-sized enterprises (75% non-Bumiputera and 25% Bumiputera SMEs) with a total approved value exceeding RM75 billion.
  • RM44 billion is earmarked for small, medium and micro enterprises in the form of loans and credit guarantees that will distributed by various agencies such as Tekun, Bank Negara, Amanah Ikhtiar and Bank Simpanan Nasional.
  • 40 million ringgit is provided to implement the Shop Malaysia Online Program to encourage small traders, especially in the food sector, to do business from home.

Job Opportunities

  • The government is targeting a total investment of up to RM95 billion for the New Industrial Master Plan 2030 (NIMP 2030). On top of this, 3.3 million job opportunities with an intermediate salary of up to RM4,510 per month will be provided by 2030.
  • RM28 million will be allocated for the development of the MYStartup platform as a single gateway that gathers startups and facilitates their business activities. This initiative will utilise a fund of RM200 million from various financing agencies and venture capitalists under one platform.
  • The Skills Development Fund Corporation (PTPK) will provide education loans to 12 thousand trainees who follow the Skills Certification Program – RM180 million is allocated under the TVET Training Fund for this.
  • RM100 million is allocated to provide industry-recognized professional certification to TVET graduates and to serve as an incentive for the industry to collaborate with public TVET institutions.
  • RM1.5 billion funding from Government-linked companies (GLCs) and government-linked investment companies to encourage startups, to enter High Growth, High-Value (HGHV) sectors such as the digital economy, aerospace technology and electronics and electrical (E&E) fields.
  • To create a broader ecosystem for the electrical and electronics (E&E) cluster in the northern region, a high-tech industrial area in Kerian, Perak will be established.
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© wklzzz | 123rf

Green Energy & Electric Vehicles (EV)

  • Net Energy Metering (NEM) will be extended until December 31, 2024 to encourage more people to use solar panels.
  • Solar panels will be installed at government buildings and electric vehicles will be used as official government vehicles.
  • RM200 billion allocation to encourage industries to shift towards a low-carbon economy.
  • Putrajaya to introduce a scheme to encourage the usage of electric motorcycles for individuals earning RM120,000 and below. Rebates of up to RM2,500 is expected to be provided to motorists.
  • 150 electric buses will be acquired by Prasarana Malaysia Berhad and three bus depots will be built (RM600mil allocation).
  • Income tax exemption of up to RM2,500 for four years will be provided to those spending on EV charging ports.
  • Tax rebates for EV vehicle rentals will be extended for another two years.

Natural Disaster Prevention

  • RM300 million for the Natural Disaster Management Agency (Nadma), including RM100 million will be channelled for flood mitigation.
  • RM11.8 billion for 33 high-priority flood mitigation projects including Sungai Pahang, Sungai Langat Phase 2 and Sungai Likas.
  • RM200 million allocation for the National Disaster Aid Fund for 9 permanent relief centres and repairs for toilets, bathrooms and stores at 1,500 relief centres.
  • RM20 million allocation for 150 local authorities to repair damaged ditches and drains, aimed at reducing stagnant water and flash flood risks.
  • RM563mil allocation for nationwide slope repair, monitoring, prevention, reporting programs, and early warning systems for over 2,000 high-risk slopes. These are aimed at preventing tragedies like the one in Batang Kali, Selangor.

Family & Women

  • RM2.4 billion allocations for over 450,000 individuals, especially the hardcore poor, senior citizens, children and OKU.
  • The government will continue paying for driving tests for Class B2 motorcycle licenses, e-hailing and taxis for over 40,000 youth from underprivileged families.
  • Vulnerable groups ( disabled, retirees, elderly and ex-convicts) will benefit from allocations for skills training from HRD Corp under their Madani training programme (15% of total levy collection).
  • RM1 billion to protect the wellbeing of elderly comprising cash assistance, funds towards care institutions and centres.
©ferli | 123rf

Higher Education and PTPTN

  • Registration fees to public universities will not exceed RM1,500 beginning January 2024.
  • Initial allocation of RM20 million for the establishment of an artificial intelligence study centre at Universiti Teknologi Malaysia (UTM).
  • 10% to 15% discount for PTPTN loan repayments from 14 Oct 2023 till 31 March 2024.
  • RM250 million for enhancing and extending WiFi service coverage across all public universities.

CHECK OUT: 9 Student Rental Options Near Sunway University

Tourism

  • Visit Malaysia Year will be in 2026 (VMY2026).
  • RM47 million will be spent to improve passenger facilities at the Tioman Airport terminal. The existing runway will also be extended to 1,300 meters.
  • RM20 million to renovate and improve tourist attractions such as Teluk Kemang in Negeri Sembilan, Tasik Timah Kasoh in Perlis and Kenong Rimba Park in Pahang.
  • RM80 million is also provided to preserve and conserve buildings and heritage sites that have the potential to be recognized by UNESCO including Niah Cave in Sarawak; Bujang Valley in Kedah and the Royal Belum Forest in Perak.
  • RM20 million forThink City to preserve the value of Kuala Lumpur as a creative and cultural city.
  • Rm350 million will be allocated for various tourism activities including:

– Organising VMY2026 promotional campaigns.
– Matching grants for private chartered flight operators to increase international air connectivity into Malaysia.
– Grant for the Islamic Tourism Centre to boost Muslim-friendly tourism activities.

Employee Provident Fund (EPF)

  • Contributor’s EPF accounts will be restructured to empower the savings of retirees. Also, Flexible EPF accounts will be introduced so that contributors can access them anytime.
  • The government’s matching contribution for EPF’s i-Saraan scheme for self-employed workers will now be limited to RM500 annually and limited to RM5,000 for a lifetime.
  • The government’s contribution for EPF’s i-Suri for housewives will now be raised to RM300 each year and a limit of RM3,000 for a lifetime.
  • RM50 million was allocated for the Housewives Social Security Scheme. This will benefit 400,000 housewives registered under e-Kasih.
  • EPF’s i-Sayang will be extended to enable wives to transfer 2% of their contribution to their husbands.
  • The monthly salary ceiling for the contribution of Socso will be raised to RM6,000 from the current RM5,000.

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