KUALA LUMPUR – The Penang state government today presented the 2026 Budget, which totals RM1.088 billion for operating expenditure, marking a record-low deficit of RM19.92 million, the smallest in the state’s history.
Chief Minister Chow Kon Yeow revealed that the operating expenditure for Budget 2026 saw an increase of RM147.72 million, or 15.71 per cent, compared to the RM940.223 million allocated in Budget 2025, Bernama reported.
Of the RM1.088 billion, RM1.051 billion is earmarked for supply expenditure, while RM37.07 million is set aside for charged expenditure.
“Operating expenditure breakdown: RM226.73 million (20.84 per cent) is for emoluments, RM200.51 million (18.43 per cent) for services and supplies, RM3.59 million (0.33 per cent) for assets, RM645.73 million (59.35 per cent) for grants and fixed fees, and RM11.38 million (1.05 per cent) for other expenses,” he explained.
Chow attributed the increase in emoluments by RM19.19 million (9.25 per cent) to the second phase of the Public Service Remuneration System (SSPA), while the rise of RM6.58 million (3.39 per cent) in services and supplies reflects the impact of the new minimum wage policy.
He also noted that the operating expenditure includes a contribution of RM265 million to the State Development Fund (KWPN), which will cover Penang’s 2026 development expenditure commitment of RM318.62 million.
For 2026, Chow highlighted that the state’s focus would be on high-impact projects of strategic importance, including land acquisition for the Mutiara Line Light Rail Transit (LRT) project, the Gurney Bay Phase 2 project, the development of Silicon Island, and various extension projects under the Penang Transport Master Plan (PTMP).
Alongside new projects, Chow said 122 continuation projects were also planned, covering areas such as public infrastructure, community facilities, and special economic initiatives.
The state government expects to generate RM1.068 billion in revenue, with RM269.78 million from tax revenue, RM699.69 million from non-tax revenue, and RM98.56 million from non-revenue receipts.
Revenue for 2026 is projected to increase by RM161.44 million, or 17.81 per cent, compared to 2025.
Chow also noted the introduction of a new land tax rate, expected to drive an increase in tax revenue, particularly direct taxes. To mitigate the impact on landowners, the state will offer land tax rebates.
The 2026 Budget is forecast to deliver the state’s lowest deficit, at RM19.92 million, compared to a projected deficit of RM33.63 million for 2025. – November 14, 2025