Penang’s 2026 budget allocates RM1.09 billion for operating expenditure, projecting a historic low deficit of RM19.92 million
GEORGE TOWN: The Penang state government has tabled its 2026 budget totalling RM1.088 billion for operating expenditure.
Chief Minister Chow Kon Yeow announced an estimated deficit of RM19.92 million, the lowest in the state’s history.
The operating expenditure for 2026 increased by RM147.72 million, or 15.71%, compared to the RM940.223 million Budget 2025.
Of the total RM1.088 billion, RM1.051 billion was allocated for supply expenditure and RM37.07 million for charged expenditure.
Emoluments account for RM226.73 million, or 20.84% of operating expenditure.
Services and supplies received RM200.51 million, while grants and fixed fee charges were allocated RM645.73 million.
“The increase in emoluments of RM19.19 million is due to the implementation of the second phase of the Public Service Remuneration System,” Chow said when tabling the budget at the Penang State Legislative Assembly.
The estimated operating expenditure includes RM265 million in contributions to the State Development Fund.
This will cover Penang’s 2026 development expenditure commitment of RM318.62 million.
The state government’s main focus for 2026 includes high-impact projects with strategic importance.
These encompass land acquisition for the Mutiara Line LRT project and Gurney Bay Phase 2 development.
Silicon Island development and extension projects under the Penang Transport Master Plan are also prioritised.
Besides new projects, 122 continuation projects have been listed for next year.
These include public infrastructure, community facilities and special economic projects categories.
The state government aims to collect RM1.068 billion in revenue for 2026.
Tax revenue is projected at RM269.78 million, with non-tax revenue at RM699.69 million.
Non-revenue receipts are estimated at RM98.56 million.
The 2026 revenue is projected to increase by RM161.44 million, or 17.81%, compared to 2025.
“The state government expects an increase in tax revenue through the new land tax rate starting in 2026,” Chow said.
He added that land tax rebates will be introduced to ensure landowners are not affected by the new rate.
The Budget 2026 deficit of RM19.92 million compares favourably to the estimated RM33.63 million deficit for 2025. – Bernama
