Kuala lumpur: The Dewan Negara today passed the Capitation Grant Bill 2026, which seeks to amend the rates of grant allocated according to the population of each state based on a new rates structure. Deputy Finance Minister Liew Chin Tong stated the proposed increase in rates would benefit all states, especially those with less population and limited state revenue, while ensuring that more populous states receive a higher annual grant increase.

According to BERNAMA News Agency, the rates for the first 100,000 persons, the next 500,000 persons, the next 500,000 persons, and the remainder will be increased to RM102 per person (from RM72), RM14 per person (previously RM10.20), RM13.50 per person (previously RM10.80), and RM13 per person (previously RM11.40), respectively. The bill was approved by a majority voice vote after being tabled by Liew for its second and third readings in the Dewan Negara, following a debate by 15 senators.

The decision to review the grant was reached jointly by federal and state governments, involving menteris besar, chief ministers, and the Sarawak Premier. The grant review every 10 years is based on the Department of Statistics Malaysia's (DOSM) studies conducted each decade. Capitation grants are federal funds provided to states based on population size, with the last amendment to the grant rates made in 2002, 24 years ago.

Liew noted that the proposed amendment will increase operating grants to states on a per capita basis, focusing on less populous states. All states will receive annual grant increases based on population projections by DOSM. Additionally, Liew suggested that senators form a Dewan Negara committee to review federalism, address current issues, and foster discussions on related matters.

The Act will come into force on April 1, involving an additional expenditure of up to RM538 million. The Dewan Negara sitting is scheduled to continue tomorrow.