Malaysia Budget 2024 Insights: Key Takeaways for Business Owners and Employees [With Infographic]

Malaysia Budget 2024 for employers and employees
Reading Time: 7 minutes

The Malaysian government announced its Budget for 2024, or Belanjawan 2024, with a speech by YAB Dato’ Seri Anwar Ibrahim, the Prime Minister and Minister of Finance. It signalled a critical juncture for the country’s workers and businesses in an era of fast economic transition. While we’re all still dealing with the repercussions that COVID-19 has left behind, we’re also faced with economic challenges such as the weakening Ringgit along with the rising costs of living.

With an allocation of RM393.8 billion, the budget is designed to spur growth, innovation, and equitable opportunities across various sectors. Understanding the Malaysia Budget 2024 is not only advantageous for employers and business owners operating out of Malaysia, it is also necessary for everyday Malaysians to use these insights when making plans for their future.

In this article, we break down the complexities of the budget to simple and actionable takeaways, covering only the most important facts that may affect your work in Malaysia. You may refer to the details below the infographic for more explanation on each key takeaway.

Malaysia Budget 2024 Infographic

For Everyone: Measures to Boost Malaysia’s Revenue

Increase in SST to 8%: The Service Tax rate was increased from 6% to 8% in 2024. However, this increase does not include services such as food and beverage, telecommunications, vehicle parking space and logistics.

Implementation of Capital Gains Tax from 10%: This applies to net gains from disposal of local companies’ unlisted shares at the rate of 10%. However, there may be exemptions of the Capital Gains Tax on the disposal of shares related to certain activities such as approved Initial Public Offering (IPO), internal restructuring, and venture capital related investments subject to stipulated conditions.

Investment into High Growth and High Value (HGHV) Sectors: Reinvestment tax incentive for high-value activities using tiering mechanism in the form of investment tax allowance of either 70% or 100%. The Government also proposes that the Pengerang Integrated Petroleum Complex (PIPC) be shaped into a development hub for chemical and petrochemical sector with tax incentive packages in the form of a preferential tax rate or investment tax allowance.

Malaysia as an Investment Destination: In developing Malaysia’s advantage as a preferred destination for foreign investment, the government will implement several new policies and directives to improve ease of doing business. Such initiatives include:

  • Establishing a high-tech industrial area in Kerian, Perak to widen the E&E cluster ecosystem in the northen region
  • Establishing an Investment and Trade Coordination Action Committee (JTPPP) under MITI to facilitate FDI and DDI from application stage until realisation
  • Allocating RM 100m for the Domestic Investment Strategic Fund under MIDA
  • Allocating RM 10m for the development of technology-based applications by Collaborative Research in Engineering, Science and Technology (CREST)

For Business Owners: A New Dawn

Embracing Technology and Innovation

Mandatory adoption of e-invoicing: Business owners, particularly those in the small and medium enterprise (SME) sector, stand to benefit significantly from various incentives and support programs aimed at fostering innovation, sustainability, and digital transformation. Notably, the budget emphasises the mandatory adoption of e-invoicing for taxpayers generating over RM100 million in revenue, a step towards enhancing tax compliance and operational efficiency. This will begin in 1 August 2024. Meanwhile, for taxpayers based on other income category, will be enforced in phases, with a target of comprehensive implementation by 1 July 2025 and supported with the use of Tax Identification Number (TIN).

Growth in Research, Development, Commercialisation, and Innovation (R&D&C&I) Activities: To ensure Malaysia is successfully listed among the Top 30 countries in the Global Innovation Index by 2025, several R&D funds have been allocated to boost innovation in various sectors. Institutions and programs that will have special attention include the Ministry of Higher Education (KPT), the INNOVATHON Programme, Industrial Technology Innovation Centre (ITIC), the MyGenom Programme, and the Ruang Daya Cipta (RDC) Programme.

5G Cyber Security: An allocation of RM60 million has been set aside to develop 5G Cyber Security Testing Framework and local expertise on 5G technology.

Financial Empowerment and Support

A substantial allocation of RM44 billion is earmarked to provide loans and financial guarantees to support MSMEs. Additionally, Bank Negara Malaysia (BNM) will make available RM8 billion in loan funds to assist SME companies, further demonstrating the government’s intent to bolster the backbone of the economy.

Nurturing the Green Economy and Halal Sectors

The budget also introduces tailored financial schemes for halal SMEs and underscores the importance of green economy initiatives. Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) will guarantee up to 80% of loans for entrepreneurs engaged in the green economy, technology, and halal sectors, with an allocation of RM20 billion for this purpose.

The 15th International Conference on Islamic Economics and Finance (ICIEF2023) held in December 2023 addressed issues and formulated actions that can be taken to enhance status of Malaysia’s status as a global islamic economy leader. Some initiatives include:

  • Implementing Value-based Intermediation (VBI) and pilot programs by BNM with Islamic financial institutions to promote impact-driven investments, enhancing Investment Account (IA) utilisation.
  • Leveraging on the Malaysia International Islamic Finance Centre (MIFC) in enhancing Malaysia’s Islamic finance sector competitiveness.
  • Funding designated for the International Islamic Finance Education Centre (INCEIF), in partnership with MIFC and the industry, to spark research, innovation, and creativity within the Islamic economy.
  • Proposals include a tax exemption for income from Islamic Securities Selling and Buying (ISSB) starting from the 2024 assessment year, special programs by nine financial institutions for SMEs in the halal industry, reduction of halal certification processing time from 51 to 30 days, support for i-TEKAD with matching grants for micro enterprises, and soft loans for developing waqf lands nationwide.

Enhancements for the Creative and Digital Economy

Creative industries and digital economy centers receive a significant boost, with allocations aimed at promoting local creative works, enhancing digital economy capabilities, and supporting film production and digital content creation. This includes specific tax incentives and grants to encourage high-quality productions and creative projects that embody national values.

Digitisation Grants of up to RM5,000: A total of RM100 million is provided for digitalisation grants of up to RM5,000 for the benefit of more than 20,000 MSMEs. This grant can be used to upgrade sales, inventory, and digital accounting systems.

Shop Malaysia Online: RM40 million is provided for the implementation of a Shop Malaysia Online Programme to enable homebased enterprises among small traders, especially within the F&B industry.

Enhancements for Digital Economy Centers (PEDi): The role of the Digital Economy Centre in each state constituency will continue to be enhanced to support small entrepreneurs selling their products online with an allocation of RM25 million.

RM 160m to Spur Local Creative Talent and Artists: Includes initiatives such as a Digital Content fund to boost the digital creative industry, promoting Malaysia as an international film destination through cash rebate provisions under the Film in Malaysia Incentive (FIMI), and the MyCreative Matching Grant Scheme to support local artists for the production of creative projects. There will also be preferential tax rates between 0% to 10% for foreign film production companies, actors and crews filming in Malaysia. 

For Employees: Securing Prosperity and Growth

Skill Development and Employment Opportunities

The budget also focuses on human capital development, with HRD Corp receiving RM1.6 billion to train approximately 1.7 million employees. This initiative is part of a broader strategy to enhance the workforce’s skills and competencies, ensuring Malaysians are well-equipped to thrive in the evolving job market. This fund will also cover vulnerable groups such as former inmates, the disabled, the elderly, and retirees.

Next year, the allocation for Technical and Vocational Education and Training (TVET) education will reach RM6.8 billion. This follows the initial steps taken by the First Belanjawan MADANI to overhaul the nation’s TVET system through partnerships with Government-Linked Companies (GLCs) and the private sector. To date, collaborations have been formalized with 17 GLCs and 44 private entities, resulting in 61 memoranda of understanding. These agreements span curriculum development and the contribution of equipment and expertise.

Other key initiatives mentioned include:

  • Provision of skills credit fund or MySkills Credit through HRD Corp to fund individual’s choice of skills training, extending to language courses, photography, tailoring classes, among others.
  • The Academy in Industry Programme will be implemented to provide on-the-job training for a period of up to 18 months.
  • Provision of education loans to 12,000 trainees under the Skills Certification Programme, where a substantial portion is reserved for trainees in the maritime field, arts, and the aerospace sectors.
  • The Tahfiz TVET Programme, which will provide opportunities for tahfiz students in diversifying their skillsets while pursuing their hafazan education.
  • Higher multi-tier levy rates for foreign workers

Enhancing Welfare and Inclusivity

Special Task Force on Agency Reform (STAR): A total of RM2.4 billion is allocated to build, maintain, and refurbish quarters for civil servants, teachers, hospital staff, policemen, army and fire department personnel.

Micro and entrepreneurs from low-income group: Special attention is given to vulnerable groups, with tailored financial aid programs for micro-entrepreneurs with disabilities and supplementary funding for the iTEKAD social finance program. These measures reflect a holistic approach to nurturing an inclusive and supportive ecosystem for all Malaysians. RM25 million will be assigned to iTEKAD.

Strengthening the Startup Ecosystem

The government’s vision to position Malaysia within the top 20 for the global startup ecosystem by 2030 underscores a commitment to innovation and entrepreneurship. Initiatives like MyStartup, with a budget of RM28 million, aim to create a conducive environment for startups to flourish, further enhancing Kuala Lumpur’s status as a hub for the digital industry and startups in Southeast Asia. The government also plans to continue support to startups by optimising a fund of RM200 million under various funding agencies and venture capitals on a single platform, including: 

  • Cradle Fund (RM30m)
  • MAVCAP (RM100m)
  • KMP (E&E & RE) (RM10m)
  • MTDC (RM3m)
  • MOSTI (HTDF) (RM5.3m)
  • MDV (TACT 2.0) (RM22.7m)
  • MDV (Tech FMG) (RM25m)
  • MRANTI (RM4m)

Additionally, to boost the global reach of local startups and elevate their competitive edge to become leaders in the regional market, Government-Linked Companies (GLCs) and Government-Linked Investment Companies (GLICs) are set to allocate up to RM1.5 billion. This funding aims to support startups, including those led by Bumiputera SME entrepreneurs, in pursuing high growth, high value (HGHV) sectors such as the digital economy, aerospace technology, and electronics and electrical (E&E) industries.

Lastly, for enhancing startup capital support:

  • RM100 million is allocated to MyCIF over three years, aiming to bolster initiatives in food security, environmental sustainability, and community development. This includes leveraging waqf assets for the benefit of health, education, and agricultural sectors.
  • Expansion of tax incentives for individuals investing in startups via equity crowdfunding platforms to include those investing through Limited Liability Partnership nominee companies, available until 31 December 2026.
  • Extension of the angel investor tax incentive until 31 December 2026, promoting investment in tech startups.


Malaysia Budget 2024 heralds a transformative era for business owners and employees alike, characterised by strategic investments in technology, innovation, and human capital development. Through a balanced approach that prioritises economic growth, inclusivity, and sustainability, the budget sets a solid foundation for Malaysia’s journey towards becoming a resilient and dynamic economy on the global stage.

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