Penang: The Penang state government today tabled the Budget 2026 totalling RM1.088 billion for operating expenditure, with an estimated deficit of RM19.92 million, the lowest in the state’s history.
According to BERNAMA News Agency, Chief Minister Chow Kon Yeow stated that the operating expenditure for Budget 2026 rose by RM147.72 million, or 15.71 per cent, compared to Budget 2025, which amounted to RM940.223 million. Of the total RM1.088 billion, RM1.051 billion was allocated for supply expenditure and RM37.07 million for charged expenditure.
“A total of RM226.73 million or 20.84 per cent of operating expenditure comprises emoluments; services and supplies (RM200.51 million, 18.43 per cent); assets (RM3.59 million, 0.33 per cent); grants and fixed fee charges (RM645.73 million, 59.35 per cent) and other expenses (RM11.38 million, 1.05 per cent),” said Chow while tabling the budget at the Penang State Legislative Assembly.
Chow highlighted that the increase in emoluments of RM19.19 million or 9.25 per cent is due to the implementation of 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 is attributed to the increase in the minimum wage policy.
The budget also includes contributions to the State Development Fund (KWPN) of RM265 million to cover Penang’s 2026 development expenditure commitment of RM318.62 million. The state government’s main focus for 2026 is on high-impact projects with strategic importance, including land acquisition for the Mutiara Line Light Rail Transit (LRT) project, Gurney Bay Phase 2 project, the development of Silicon Island, and extension projects under the Penang Transport Master Plan (PTMP).
Chow also mentioned 122 continuation projects listed for next year, encompassing sectors such as public infrastructure, community facilities, and special economic projects. The state government aims to collect RM1.068 billion in revenue, with tax revenue at RM269.78 million, non-tax revenue at RM699.69 million, and non-revenue receipts at RM98.56 million.
Revenue for 2026 is projected to increase by RM161.44 million or 17.81 per cent compared to 2025. Chow indicated an expected increase in tax revenue, especially direct taxes, through a new land tax rate starting in 2026, although land tax rebates will be introduced to mitigate the impact on landowners.
“The Budget 2026 is expected to post the lowest deficit in the history of the Penang state budget, amounting to RM19.92 million compared to the estimated deficit in 2025 of RM33.63 million,” Chow concluded.