THE Penang government has welcomed the Federal Government’s announcement of an increase rate in the capitation grant rate.
Prime Minister Datuk Seri Anwar Ibrahim recently announced that the grant distributed to state governments will be increased by 25%, or RM109 million, bringing the total allocation to RM548 million effective from 2026.
Anwar, who is also the Finance Minister, said the new rate was approved during the 2025 National Finance Council meeting, which he chaired on March 6.
“This marks the first time the capitation grant rate has been reviewed since 2002. The review reflects the Madani Government’s commitment to assisting state governments in delivering services to the people,” he said.
Chief Minister Chow Kon Yeow thanked the Federal Government for the increase.
“Although the increment from RM25 million to around RM30 million is relatively minor, we still can use it for any programmes or projects in the state.
“However, we remain steadfast in our previous request for 20% of the taxes collected by the Federal Government from Penang to be allocated back to the state to enhance our development efforts.
“This is because for tax revenue alone, Penang contributes around RM8 billion. If the Federal Government were to return 20%, we would receive around RM1.6 billion.
“Nevertheless, on behalf of the state government, I would like to thank the Federal Government for the increased capitation grant,” he told reporters when asked about the matter today.
Earlier, Chow attended the PCEB Business Events Penang 2024 Annual Review launch at the Iconic Marjorie Hotel in Bayan Lepas this evening.
Story by Riadz Akmal
Pix by Muhamad Amir Irsyad Omar
Video by Siti Nuratikah Rahmat