220 agri projects approved nationwide under land usage scheme
KUALA LUMPUR: A total of 220 projects have been approved under the Land Use Optimisation Programme in collaboration with state governments nationwide last year and this year, as of May 30.
The Agriculture and Food Security Ministry said the projects encompass crop cultivation, livestock, fisheries, agro-tourism, and capacity-building for farmers, planters, fishermen and breeders.
ALSO READ: Malaysia's food security at risk
"Through Budget 2025, the Federal Government has allocated RM300mil to execute various agricultural development initiatives in partnership with state governments.
"This programme includes improving, upgrading and carrying out agricultural activities on land which is under the joint jurisdiction of state governments and the ministry,' it said in a statement on Friday (June 20).
The matter was announced at the first meeting of the Agriculture and Food Security Minister with state agriculture executive councillors for this year in Putrajaya on Thursday (June 19).
The meeting also discussed a proposal for the official handover of 51 National Satellite Farm complexes built by the Veterinary Services Department using federal funds on state-owned land in Negri Sembilan, Johor and Perak.
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"This move aims to streamline the leasing and maintenance of immovable assets by the respective state authorities in a lawful and organised manner.
"The meeting agreed that the handover would resolve issues of unclear asset ownership and enable state governments to manage and maintain the assets more systematically, ensuring the continuity of livestock operations and optimal use of existing infrastructure,' the statement read.
Meanwhile, on the role of state executive councillors addressing "grey areas" in rice bowl zones, one of the proposals raised was to transfer assets with unclear ownership to the state or district Irrigation and Drainage Department (DID), to ensure more efficient and effective padi field irrigation management.
"This effort is expected to resolve overlapping responsibilities between the Integrated Agriculture Development Area and DID, thereby streamlining infrastructure management and boosting national padi production,' the statement added.
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Meanwhile, state governments are encouraged to leverage data from the 2024 Interim Agricultural Census and the Integrated Agricultural Statistics System (TaniStats) to formulate more focused and high-impact policies, strategies and development plans for the agri-food sector at the state level, it said.
"The meeting also noted the urgent need for strategic action to address cross-border livestock smuggling along the Malaysia-Thailand border, to safeguard the sector from disease threats and ensure its continued competitiveness,' the statement read.
The meeting was a platform for policy coordination, information sharing and aligning commitments between the Federal and state governments to drive a more integrated agri-food development agenda. – Bernama
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The Star
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220 agri projects approved nationwide under land usage scheme
KUALA LUMPUR: A total of 220 projects have been approved under the Land Use Optimisation Programme in collaboration with state governments nationwide last year and this year, as of May 30. The Agriculture and Food Security Ministry said the projects encompass crop cultivation, livestock, fisheries, agro-tourism, and capacity-building for farmers, planters, fishermen and breeders. ALSO READ: Malaysia's food security at risk "Through Budget 2025, the Federal Government has allocated RM300mil to execute various agricultural development initiatives in partnership with state governments. "This programme includes improving, upgrading and carrying out agricultural activities on land which is under the joint jurisdiction of state governments and the ministry,' it said in a statement on Friday (June 20). The matter was announced at the first meeting of the Agriculture and Food Security Minister with state agriculture executive councillors for this year in Putrajaya on Thursday (June 19). The meeting also discussed a proposal for the official handover of 51 National Satellite Farm complexes built by the Veterinary Services Department using federal funds on state-owned land in Negri Sembilan, Johor and Perak. ALSO READ: Food security game-changer: Malaysia entering cultured meat revolution "This move aims to streamline the leasing and maintenance of immovable assets by the respective state authorities in a lawful and organised manner. "The meeting agreed that the handover would resolve issues of unclear asset ownership and enable state governments to manage and maintain the assets more systematically, ensuring the continuity of livestock operations and optimal use of existing infrastructure,' the statement read. Meanwhile, on the role of state executive councillors addressing "grey areas" in rice bowl zones, one of the proposals raised was to transfer assets with unclear ownership to the state or district Irrigation and Drainage Department (DID), to ensure more efficient and effective padi field irrigation management. "This effort is expected to resolve overlapping responsibilities between the Integrated Agriculture Development Area and DID, thereby streamlining infrastructure management and boosting national padi production,' the statement added. ALSO READ: Ensuring food security in face of climate change Meanwhile, state governments are encouraged to leverage data from the 2024 Interim Agricultural Census and the Integrated Agricultural Statistics System (TaniStats) to formulate more focused and high-impact policies, strategies and development plans for the agri-food sector at the state level, it said. "The meeting also noted the urgent need for strategic action to address cross-border livestock smuggling along the Malaysia-Thailand border, to safeguard the sector from disease threats and ensure its continued competitiveness,' the statement read. The meeting was a platform for policy coordination, information sharing and aligning commitments between the Federal and state governments to drive a more integrated agri-food development agenda. – Bernama
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KPKM Approved 220 Agricultural Projects Under Land Use Optimisation Programme
KUALA LUMPUR, June 20 (Bernama) -- A total of 220 projects have been approved under the Land Use Optimisation Programme in collaboration with state governments nationwide for 2024 and 2025, as of May 30. In a statement today, the Ministry of Agriculture and Food Security (KPKM) announced that the projects encompass crop cultivation, livestock, fisheries, agro-tourism, and capacity-building for farmers, planters, fishermen and breeders. 'Through Budget 2025, the Federal government has allocated RM300 million to execute various agricultural development initiatives in partnership with state governments. 'This programme includes improving, upgrading and carrying out agricultural activities on land which is under the joint jurisdiction of state governments and KPKM,' the statement read. The matter was announced at the first meeting of the Minister of Agriculture and Food Security with State Agriculture Executive Councillors for 2025, held in Putrajaya yesterday. In addition to two papers for consideration and five papers for information, the meeting also discussed a proposal for the official handover of 51 National Satellite Farm complexes built by the Department of Veterinary Services using federal funds on state-owned land in Negeri Sembilan, Johor and Perak. 'This move aims to streamline the leasing and maintenance of immovable assets by the respective state authorities in a lawful and organised manner. 'The meeting agreed that the handover would resolve issues of unclear asset ownership and enable state governments to manage and maintain the assets more systematically, ensuring the continuity of livestock operations and optimal use of existing infrastructure,' the statement read. Meanwhile, on the role of state executive councillors addressing 'grey areas' in rice bowl zones, one of the proposals raised was to transfer assets with unclear ownership to the state or district Department of Irrigation and Drainage (JPS), to ensure more efficient and effective padi field irrigation management.
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A balancing act for SST
After a two-month delay, the government has announced that the targeted revision of the sale tax rate and expansion of the service tax scope will be implemented on July 1. A grace period is given for companies to comply with the newly revised sales and service tax (SST), with no prosecution or penalties to be imposed until Dec 31. The expanded SST framework is part of broader fiscal reforms aimed at strengthening the country's fiscal position through increasing revenue and broadening tax base. It is projected to yield RM5 billion in tax revenue this year, or an annualised RM10 billion for a full year, to help offset lower oil revenue. The Finance Ministry is confident that it can meet Budget 2025's fiscal deficit target of 3.8% of gross domestic product jdespite a likely downward revision of this year's GDP growth estimates that are currently between 4.5% and 5.5%. Despite the government providing advance notice of the planned sweeping SST reforms during the tabling of Budget 2025 on Oct 24 last year and stakeholder engagement, businesses have called on the government to defer implementation of the expanded SST, review the threshold of exemption and the proposed tax rate, and provide a waiver for some taxable services. Based on announcements from business and industry groups, the main concerns surrounding the expanded SST is the timing of its implementation, increased business costs, potential disruptions to their operations, disproportionate impacts on consumers, a lack of clarity and insufficient lead time for preparation. The timing of the implementation has to consider the economic conditions and business environment. It is widely acknowledged that the Malaysian economy has slowed, with growth moderating from the second half of last year and continuing into the first half of this year. The current global geopolitical landscape, US trade policies, and recent escalation of conflicts in the Middle-East present significant downside risks to the global economy, potentially causing spillover effects in domestic economy. Businesses are expressing caution due to ongoing concerns about disruptions induced by tariff uncertainty, leading to a more cautious approach to spending and investment. Simultaneously, consumers are likely to adjust their discretionary spending even amid stable labour conditions and low inflation of 1.5% in the first four months of this year. Hence, the timing and sequencing of regulatory policy and tax changes are crucial to avoid undue burden on businesses and consumers. Careful planning is essential to ensure the measures effectively address economic challenges without creating unintended consequences. Businesses are naturally concerned about the 'bunching' of cost increases as they can significantly impact profitability, cash flow, and even viability of the business. Since 2023, many costs induced regulatory and policy changes have been incurred or come due this year and next year, making it difficult for businesses to manage. These include the RM200 rise in the national minimum wage to RM1,700 per month, the planned implementation of 2% employers' contribution to the Employees Provident Fund for foreign workers, reduction in the subsidy for RON95 fuel and an impending hike in electricity tariffs as well as the forthcoming port tariff adjustment of 30% at Port Klang implemented in phases over a three-year period, starting July 1. With businesses already reeling from rising operating costs, implementing the expanded SST could further burden businesses with increased costs and squeezing their profit margins. Most construction contracts are normally awarded on a fixed-price and fixed-duration basis, which limits the industry's flexibility to absorb new costs without disrupting the project delivery. Back-of-the-envelope calculations of operating costs increases due to a 8% service tax on rental or leasing together with other personnel cost-related measures indicate that the operating costs for a small enterprise in business services would rise by 6.1% or RM8,398 per month. Costs for a small enterprise in the fashion business could increase by 8.9% or RM5,924 per month, and a medium-sized enterprise in manufacturing could face an 11% increase in costs or RM26,058 a month. Ultimately, increased business costs, if not absorbed, would be passed onto consumers, potentially dampen discretionary consumer spending due to higher prices of non-essential goods and a wider range of taxed services. Under the revised sales tax structure, a total of 3,409 items previously exempted are now subject to tax, with 3,216 items (28.1% of total goods) at 5%, and 193 items (1.7%) at 10%. In total, out of 11,458 items, 1,809 items (15.8%) remain exempted, while 4,077 items (35.6%) are taxed at 5% and 5,547 items (48.4%) at 10%. Compared with 2022, the number of taxed 'Raw Materials and Intermediate Goods' increased by 1,860 items, bringing the total to 3,472 items subject to 5% or 10% tax (36.1% of the total 9,624 items taxed). This is followed by 'Machinery, Transport Equipment, and Electronics', which increased by 835 items to 3,280 items (34.1%), and 'Consumer Goods' increased by 222 items to 1,692 items (17.6%). In the 'Fruits and Vegetables' category with a total of 514 items, 213 items (41.4%) remain exempted, down from 379 in 2022. Conversely, 299 items (58.1%) are now subject to 5% tax, up from 134 items previously. These are primarily imported products, while locally grown produce remains tax-exempted. For 'Processed Foods and Beverages', exempted items have dropped significantly from 213 in 2022 to 109, while the number of items taxed at 5% increased to 398, up from 330 previously. Cost of living remains a key issue due to slow wage growth of 7% in nominal wages per worker from 2019 to 2024. Household expenditure data showed that the B40 category spend 52% of their income on basic necessities, followed by 37% for the M40, and 32% for the T20. The Finance Ministry indicated that 5.4 million Malaysians in lower and middle-income households stand to benefit from the expanded SST regime. While the zero sales tax on essential goods consumed by the public will not significantly affect the low-income households, the imposition of 5% or 10% on discretionary and non-essential goods will likely increase the prices of those goods and could potentially lead to decreased discretionary consumer spending. A revision of items subject to a higher sale tax is planned to align with the postponement of the High-Value Goods Tax. However, the distinction between essential and non-essential or premium goods is subjective and varies based on individual circumstances, including preferences and health considerations. For example, some deep-sea fish and salmon are healthy foods, not premium items, and often consumed for their health benefits. Hence, higher taxes levied on 'premium' or healthier foods could disproportionately affect middle-income households, potentially making healthier options less affordable and pushing them towards less healthy, but cheaper, alternatives. On the service tax, the scope of service tax will be expanded to cover additional services such as wellness centres, financial, and healthcare, and three new services (rental or leasing, construction and education), bringing the total to 13 taxable service groups. To mitigate the impact of any potential tax cascading, business to business (B2B) and group relief will be given exemption for businesses carrying on rental and leasing activities while B2B exemption will apply for construction services and financial services. For rental or leasing services, tenants that are small and medium enterprises (SMEs) with annual sales of less than RM500,000 will be exempted from paying the 8% service tax. We observe inconsistencies between official announcements in the Finance Ministry's press releases and gazette documents for some of the exemptions, giving rise to uncertainty and lack of clarity, which requires immediate rectification. These include 'group relief' and 'exemption for SMEs with annual sales of RM500,000', as well as 'beauty services' as a taxable category. Of particular concern is the service tax on leasing and rental services, which is expected to create significant spillover effects, particularly impacting commercial and retail businesses such as shopping malls. This is because the tax will increase costs for businesses operating within these spaces, potentially squeeze their profit margins, and ultimately, the unabsorbed costs could pass onto consumers, leading to increased prices. Many of the so-called 'essential' goods, including daily necessities, are also sold in leased retail spaces. Imposing the service tax on rental agreements may raise operational costs for store operators, especially small businesses and franchisees. These increased costs are likely to be passed on to consumers, potentially contributing to inflationary pressures on essential goods. The implementation of expanded SST has to consider the transitional rules, which allow for exemptions on contracts that straddle the implementation date. Although no prosecution or penalties will be imposed on companies that take steps to comply with SST registration and reporting requirements by Dec 31, businesses need longer lead time for preparation, especially those new taxable services and also not previously registered under SST. The provision of a 12-month exemption from tax for non-reviewable contracts is viewed as insufficient due to the type of projects and project cycles, in particular large infrastructure projects or property development have project cycles, which often exceed a year. Lee Heng Guie is the executive director of the Socio-Economic Research Centre. The views expressed here are the writer's own.
