Key points of the 2024 Malaysian Budget

- The Government will continue to encourage women to return to work by extending the tax incentives for this group until December 31, 2027.

- The exemption amount for child allowances (expenses paid directly to child care centres by employees or employers) will be raised from RM2,400 to RM3,000.

- The Drug Addicts (Treatment and Rehabilitation) Act 1983 will be amended to enable drug addicts to receive treatment and rehabilitation without being sent to jail.

- If an individual or company donates to an agency, organization, or fund approved by section 44 (6) of the 1967 Revenue Act to carry out educational programs (including sports), the government will provide tax relief of up to 10% of their total revenue.

- Starting October 14, 2023, it was announced that PTPTN will provide discounts on loan repayments, including a 10% discount on the outstanding portion of the loan in full, a 10% discount on repayment of 50% of the remaining portion, and a 15% discount on payroll deductions.

- The Government plans to impose a fixed RM10 stamp duty on real estate transfer documents involving beneficiaries who have relinquished their inheritance rights (based on a will or farad (the concept of allocating the deceased's property to their heirs under Islamic law)) rather than an ad valorem stamp duty.

- The Government will allocate RM100 million for infrastructure and social infrastructure in Xinhuanren Village.

- For companies that spend on measurement, reporting and verification (MRV) related to carbon project development, the government has proposed additional tax relief of up to RM300,000. These expenses can be deducted from carbon credits sold on the Malaysian Exchange Carbon Exchange (BCX).

- The activation price of the Rubber Production Incentive Program (IPG) will increase from RM2.70 per kilogram set in the 2023 budget to RM3 per kilogram, with a budget allocation of RM400 million.

- The amount of tax relief for the purchase of sports equipment and activities will be increased from RM500 to RM1,000. This relief policy will also be extended to expenses used for physical training.

- The Global Service Center Tax Incentives Policy will be introduced, providing an income tax rate incentive of 5% or 10%, depending on performance over 10 years.

- It is planned to implement a special income tax for film production companies, foreign film actors and staff. The tax rate is 0-10%, which applies when filming a film in Malaysia.

- Microfinance company Malaysia Trust (AIM) will receive RM100 million in funding to finance small businesses. Its non-performing loan ratio in 2022 was 0.26%.

- The government is considering exempting income tax from Islamic bond sales and purchases (ISSB) from 2024.

- While awaiting completion of the study on civil servants' pay and allowances schemes, the Government will provide an initial incentive allowance of RM2,000 to all civil servants up to grade 56, including contract-appointed civil servants, and the payment of RM1,000 incentive allowances to police, firefighters, military personnel and uniformed members.

- All government retirees will receive an incentive allowance of RM1,000, which will be paid in a lump sum at the end of February 2024.

- The Ministry of Defence has allocated RM19.7 billion and the Ministry of Home Affairs has allocated RM19 billion.

- The Ministry of Islamic Affairs Management and Development has allocated RM1.9 billion to manage and develop Islamic affairs.

- To facilitate the redevelopment of the tiered scheme, the residents' consent threshold for group sales will be lowered from 100% to a level consistent with international practices (such as Singapore) to encourage urban renewal and promote the reconstruction of old urban buildings.

- A fixed stamp duty of 4% is levied on the transfer of real estate ownership by non-citizen individuals and foreign companies (excluding permanent residents of Malaysia) to control the price of real estate.

- Under the leadership of a unified government, the government took over the development of Wanda Malaysia to ensure that strategic land is best used for people's projects in line with Madani's values. This includes providing affordable housing projects for veterans, taking into account the interests of the federal territory's indigenous communities, and providing parks and green spaces for all residents of the KL Valley.

- The Housing Credit Insurance Guarantee Scheme will be expanded to RM10 billion to benefit 40,000 borrowers.

- The total amount allocated in 2024 was RM247 million for the implementation of people's housing projects.

- The tender for the development of 19 project packages for the Sabah Pan Borneo Project (Phase 1B) will be completed in November 2023, with a total project value of RM15.7 billion.

- The Sarawak Pan Borneo Highway Plan is expected to be completed in 2024.

- The implementation of phase 2 of the Sarawak-Sabah interconnection road project involving RM7.4 billion will commence in late 2023.

- The North-South Boulevard (PLUS) from Sedenak to Simpang Renggam will be expanded at a cost of RM931 million to widen the road to six lanes.

- The government will continue construction of the five cancelled LRT3 (LRT3) stations, including Tropicana, Raja Muda, Temasya, Bukit Raja and Bandar Botanik stations, with an investment of RM4.7 billion. Retaining these stations is expected to help improve the KL Valley's public transportation network, benefiting 2 million residents.

- RM1.1 billion was allocated to address water supply issues, particularly in the Kelantan, Sabah and Labuan regions.

- The Pan Borneo Highway in Sarawak is expected to be completed in 2024.

- It is planned to implement 33 high-priority flood control projects from 2024, involving a total cost of RM11.8 billion.

- The Ministry of Finance, the Internal Revenue Service (IRB), and the National Petroleum Corporation (Petronas) are studying tax incentives for carbon capture and storage (CCS) and hydrogen sulfide projects, which are expected to be finalized before the end of the year.

- The scope of automated tax incentives will be expanded to include botanical gardens and the commodities sector to increase the productivity of plant products and reduce dependence on foreign labor.

- Provide RM510 million in R&D funding to the Ministry of Science, Technology and Innovation (Mosti) and the Ministry of Higher Education.

- The government will provide RM2.4 billion to promote agricultural products and the economic activities and social development of small farmers, involving the Federal Land Development Authority (Felda), the Federal Land Consolidation and Rehabilitation Authority (Felcra), and the Rubber Industry Small Farmer Development Authority (Risda).

- The government will extend the maximum income tax relief of RM2,500 for expenses to purchase electric vehicle (EV) charging facilities for four years, and continue the income tax credit for electric vehicle rental expenses for two years.

- The government will purchase 150 electric buses and build 3 bus garages, with a total investment of RM600 million.

- For buyers with an annual income of less than RM120,000, the Government will subsidize the purchase of e-bikes of up to RM2,400 as part of its e-motorcycle usage promotion program.

- Using Putrajaya as a model for a low-carbon city in Malaysia, the government will install solar panels for government buildings in a project by the Cooperative National Electric Power Company (TNB) and Gentari. Additionally, the federal government plans to use electric vehicles as an official means of transportation, so that TNB, Gentari, and Tesla will invest more than RM170 million to establish electric vehicle charging stations.

- The government will relax the conditions for Malaysia's “My Second Home” (MM2H) application to increase the arrival of foreign tourists and investors to Malaysia.

- The Government plans to launch new initiatives under the Malaysian Visa Liberalization Program to:

- Approval of employment passes for strategic investors in key areas

- Launch of a long-term social access pass for international students who have graduated to meet the industry's demand for skilled workers

- Improve facilities for visas on arrival, social visit passes, and multiple entry visas to encourage an influx of tourists and investors from countries such as India and China.

- For federal territories, the reduced entertainment tax on stage performances was reduced from 25% to exemption, mainly for stage performances by local artists; the entertainment tax for theme parks, family entertainment centers, indoor game centers, and simulators was 5%; and the entertainment tax for stage performances by international artists was 10%.

- 2026 was designated as the “Year to Visit Malaysia”. The goal is to attract 26.1 million foreign tourists, and domestic consumption is expected to reach RM97.6 billion. The government will allocate RM350 million to promote tourism promotion and activities in Malaysia and re-establish the country as a first-class tourist destination.

- The Government and the Port Klang Authority have jointly allocated RM50 million to maintain roads in Port Klang to carry the load limit for heavy vehicles, and RM20 million in cooperation with the upgrading of the Malaysian Maritime Single Window System (MMSW).

- To increase franchise trade, the government will provide a grant of RM10 million for the “Program Pengukuhan Francais” to increase exports.

- The Government allocated RM6.8 billion to the vocational education and training sector, of which RM100 million was allocated to provide vocational education and training graduates with industry-recognized professional certification, and as an incentive for industry to cooperate with public vocational education institutions.

- The human resources development company will use RM1.6 billion to provide 1.7 million training exercises, and will also reallocate 15% of the total levy fee to implement the Madani training program — training programs for micro, small and medium-sized enterprises (MSMEs), and training programs for disadvantaged groups.

- The Government announced that it will provide RM100 million in digital funding to fund the upgrading of sales, inventory and digital accounting systems for 20,000 small and medium-sized enterprises (MSMEs). Bank Negara Malaysia (BNM) will provide a loan fund of RM900 million to automate and digitize small and medium-sized enterprises (SMEs).

- Financial support of RM240 million will be provided to SMEs through Bank Negara Malaysia (BNM), National Savings Bank (BSN), and National Venture Group Economic Fund (Tekun).

- To incentivize companies to invest in high-growth and high-value sectors (HGHV), the government plans to provide a tiered reinvestment tax incentive policy in the form of an investment tax allowance of 70% to 100%.

- Government Associated Investment Companies (GLiCs) will provide up to RM1.5 billion to encourage start-ups, including SME entrepreneurs, to enter the HGHV sector.

- The government and the Sarawak state government have begun negotiations on the handover of air services between the port of Pahang and rural areas.

- To establish a broader ecosystem for the electronics and electronics (E&E) industrial cluster in northern Gilan, the government will open a high-tech industrial zone in Kerian in northern Gelan.

- The government will allocate RM28 million to develop the MyStartup platform to support startups.

- In response to power supply disruptions, the federal government will support hybrid solar energy generation and the construction of a power transmission network in southern Sabah.

- The government plans to identify the Pengalan Integrated Petrochemical Complex (PIPC) as a development center for the chemical and petrochemical sector, providing tax incentives with special tax rates or investment tax allowances.

- For more effective implementation, the federal government has authorized the transfer of powers to implement development projects below RM50 million to technical agencies in Sabah and Sarawak.

- The power to supply electricity will come into effect on January 3, 2024, and will be handed over to the Government of Sabah.

- The express bonus rate for short-term bonuses was increased to RM30 million, compared to RM16 million (for Sabah) and RM12.56 million (for Sarawak).

- The government will provide up to 10% of the total investment amount of the Master Plan for New Industries (NIMP) 2030 (RM95 billion), and an initial capital of RM200 million in early 2024.

- Development funding for Sabah and Sarawak will increase, with Sabah receiving RM6.6 billion (previously RM6.5 billion) and Sarawak receiving RM5.8 billion (previously RM5.6 billion).

- The second chance policy will be extended to young people under 40 with debts not exceeding RM200,000.

- Bank Negara Malaysia (BNM), in partnership with the financial sector, is developing a national fraud portal (NFP), which is expected to be completed by mid-2024. The NFP will be able to automatically track funds and speed up the detection, freezing, and return of funds.

- Funding for the National Fraud Response Centre (NSRC) will be increased from RM10 million to RM20 million to increase the Centre's functions in combating fraudulent activities.

- Allocate RM18 million to introduce legal reforms, including enacting a bill to implement alternative punishments to mandatory death sentences.

- The Government will allocate RM100 million to support NGOs and civil society organizations, including Yayasan Hasanah, an impact fund from Khazanah NasBerhad.

- The Task Force on Institutional Reform (STAR) will speed up the maintenance of government housing units. A total of RM2.4 billion was allocated to build, maintain and renovate housing units for civil servants, teachers, hospitals, police, soldiers and firefighters.

- The targeted subsidy policy for electricity consumption will be implemented this year. The top 10% of users with the highest electricity consumption will no longer be subsidized. It is expected to save RM4.6 billion instead of the estimated RM20 billion in electricity subsidy costs.

- The Government will continue to provide monthly grants of RM55 million to extremely poor families. Deposits to personal accounts will be exempted.

- Diesel subsidies will be rationalized and targeted only to specific users, such as freight operators.

- The price cap for chicken and eggs will be lifted, and prices will float freely.

- The total amount of direct cash assistance will increase from RM8 billion to RM10 billion.

- The Internal Revenue Service (IRB) will implement a mandatory electronic invoicing system from August 1, 2023, for taxpayers with annual income exceeding RM10 million. Other income categories will be implemented in stages and are expected to be fully implemented by July 1, 2025.

- Targeted subsidies will be implemented in stages in the next year.

- Taxes on high-value goods (luxury goods) will be levied at a rate of 5% to 10% depending on the threshold value of the goods, such as jewelry and watches, exempting foreign visitors.

- From March 1, 2024, net profit sales of shares of unlisted companies will be subject to 10% capital gains tax, excluding IPOs, internal restructuring, and venture capital companies.

- The service tax will be raised from the current 6% to 8% and extended to services such as logistics, brokerage, underwriting, and karaoke.

- The 2024 budget is the largest budget in Malaysia's history, with a total allocation of RM393.8 billion, of which RM303.8 billion is for operating expenses and RM9 billion is for development expenses.

- The government expects GDP growth of 4% to 5% in 2024.

- The second Madani budget reflects the unity government's determination to boost the country's economy and people's well-being.