THE Penang government submitted a request for an advance of RM100 million from the Ministry of Finance (MoF) in 2024 to help cover the projected deficit for the year.
Chief Minister Chow Kon Yeow said the request is in line with Article 109(6) of the Federal Constitution, which outlines the Federal Government’s responsibility to provide financial assistance to state governments.
“With the disbursement of this advance, the MoF will recoup the amount through a reduction in grants allocated to the state government,” Chow (PH–Padang Kota) said during his winding-up speech at the Penang State Legislative Assembly in Light Street today.
He noted that the reduction will affect four categories of federal grants, namely the Capitation Grant, Service Charges Grant, Concurrent List Grant, and the TAHAP Grant.
“These reductions will be implemented over three years — RM33 million in 2027, RM33 million in 2028, and RM34 million in 2029.
“To ensure consistency between the advance received and the MoF’s offset mechanism, the state government will record the advance as a ‘Non-Revenue Receipt.’
“The total amount, classified as non-revenue receipts, will be recognised in 2027 (RM33 million), 2028 (RM33 million), and 2029 (RM34 million),” Chow added.
Story by Riadz Akmal