Prime Minister Anwar Ibrahim will be unveiling his third budget at a time of a resurgent economy and a strong ringgit.
New: You can now listen to articles.KUALA LUMPUR: In the lead-up to the unveiling of Malaysia ’s Budget 2025 this Friday , most of the public attention has been on a singular issue: Whether the government will finally slash petrol subsidies.
What’s next is the blanket subsidies for RON95 petrol, which make up most of the RM81 billion that Malaysia spent on subsidies in 2023 and are said to unfairly benefit high-income households. The aim is to reduce this bill to RM52.8 billion this year. The analysts also added that Malaysians could instead see a bump in their salaries as wage policies are tweaked to combat inflation.Mr Anwar recently told CNBC - the American business news channel - that the budget will focus on raising income levels amid rising inflation, and after committing to boost civil servant salaries, he has hinted at introducing some “pressure” on the private sector to follow suit.
Despite the positive signs, Mr Anwar himself acknowledged in an Oct 10 post on X that there was “much room” for improvement in the country’s fiscal governance and performance. Bank Muamalat Malaysia chief economist Mohd Afzanizam Abdul Rashid said Mr Anwar could give more details on the move on Friday, including timeline and guidelines on how to apply for cash assistance for those eligible.
“So for those who qualify for cash transfers but don't get them in a timely fashion, their purchasing power will be affected.”Meanwhile, Mr Lee Heng Guie - executive director of the Socio-Economic Research Centre Malaysia - said petrol prices should not be immediately floated but gradually raised, highlighting that petrol has a “wider user base” than diesel.
Mr Amir Hamzah said softer global oil prices has given Malaysia “space” to perfect the move, and that he is hopeful of trimming the country’s subsidy and social assistance bill to “well below” the RM60 billion range next year. The Finance Ministry has pointed out that Malaysia’s tax revenue, at 12.6 per cent of gross domestic product in 2023, ranks among the lowest in the Association of Southeast Asian Nations .
“Smart politics precludes the former and there could be political considerations that work against the latter. That leaves the government with no option but to pick on all manner of taxes on the side to raise revenue.”Local media outlet Utusan Malaysia reported on Oct 5 that the government is expected to introduce several new taxes in the budget: Unhealthy food tax, carbon pricing tax, artificial intelligence tax, and inheritance tax.
But he cautioned that it could deter investments from high-net-worth individuals, who might relocate their assets or family wealth to countries with more favourable tax regimes. Ultimately, Mr Soh said he does not expect the return of GST in the budget, citing Mr Anwar’s “firm stance” against its reintroduction due to concerns over inflation.
Should the 6 per cent GST be reinstated in 2024, Malaysia is estimated to collect about RM63.5 billion in GST, almost double the RM35.8 billion SST collection projected by the government for 2024, RHB Bank Bhd economist Chin Yee Sian said in a research note in November last year. Dr Nambiar the economist said that a higher minimum wage will raise “pretty stagnant” wages and restrict migrant worker numbers in the country.
To qualify for subsidies, companies must pay a minimum wage prescribed for each job in eligible sectors. The lowest paying job under the programme is for entry-level pawnbrokers and moneylenders, starting at RM1,810.
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Malaysia’s ASEAN chairmanship in 2025 could test bloc’s unity and ties with ChinaPrime Minister Anwar Ibrahim could use Malaysia’s ASEAN chairmanship to “amplify” his country’s foreign policy priorities, such as strengthening ties with China and Russia, analysts say. But his approach is likely to be guided by his “diplomatic acumen” and commitment to ASEAN centrality.
Read more »
Zelensky sees 'opportunity' to end war in Ukraine by 2025Russian forces now hold just under 20 per cent of Ukraine, in its east and south.
Read more »
Tanjong Beach Club on Sentosa to close for revamp from Oct 21, reopening in Q1 2025Before closing, the beach club will throw its last Smack My Beach Up party on Sept 28, with a nine-hour DJ marathon.
Read more »
Singapore To Launch National Mental Health Helpline And Textline By Mid-2025A new National Mental Health Helpline and Textline service offering psychological first aid for people facing mental distress will be operational by mid-2025 in Singapore. Trained counsellors will address common mental health concerns, offer a listening ear, and brief counselling via phone or text.
Read more »
Singapore To Maintain Electric Car Rebates In 2025Singapore will continue offering substantial financial incentives for electric car buyers in 2025, aiming to encourage the adoption of EVs. Both the Land Transport Authority (LTA) and the National Environment Agency (NEA) announced that rebates on Additional Registration Fees (ARF) and Vehicle Emissions Scheme (VES) will remain largely unchanged.
Read more »
Subsidy window for hawkers to adopt digital payments extended to end-2025More than 11,500 stallholders have adopted e-payments so far.
Read more »