Malaysia Budget 2025: RON95 petrol subsidy to be tweaked so top 15% earners will not qualify, says Anwar

CNA10-18

KUALA LUMPUR: Top-earning Malaysians can expect to pay higher prices for RON95 petrol in the middle of next year as the government unveiled a larger RM421 billion (US$97.8 billion) budget for 2025 on ...

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color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMalaysia Budget 2025: RON95 petrol subsidy to be tweaked so top 15% earners will not qualify, says Anwar\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-18 17:19 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.channelnewsasia.com/asia/malaysia-budget-2025-anwar-ibrahim-petrol-subsidies-minimum-wage-4687106><strong>CNA</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>KUALA LUMPUR: Top-earning Malaysians can expect to pay higher prices for RON95 petrol in the middle of next year as the government unveiled a larger RM421 billion (US$97.8 billion) budget for 2025 on ...</p>\n\n<a href=\"https://www.channelnewsasia.com/asia/malaysia-budget-2025-anwar-ibrahim-petrol-subsidies-minimum-wage-4687106\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SST","symbol_name":"System1","start_time":0,"source_url":"https://www.channelnewsasia.com/asia/malaysia-budget-2025-anwar-ibrahim-petrol-subsidies-minimum-wage-4687106","article_id":"2476409537","we_media_id":null,"thumbnails":["https://onecms-res.cloudinary.com/image/upload/s--B2qrKUMY--/c_fill,g_auto,h_468,w_830/fl_relative,g_south_east,l_mediacorp:cna:watermark:2021-08:cna,w_0.1/f_auto,q_auto/v1/mediacorp/cna/image/2024/10/18/fdz_7873.jpg?itok=S9h-NVyU"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2476409537","pubTimestamp":1729243140,"columns":[],"sourceInfo":{"source_id":"can_highlight","name":"CNA"},"weMediaInfo":null,"summary":"According to the finance ministry’s outlook for next year, the Malaysian government revenue is projected to grow by 5.5 per cent to RM339.7 billion, spurred by higher direct and indirect tax collections.","collect":0,"end_time":0,"defaultTopTitle":"channelnewsasia.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SST":"System1","GDP":"古德里奇","BK4213":"石油与天然气的勘探与生产","BK4077":"互动媒体与服务"},"translate_title":"马来西亚2025年预算：安瓦尔表示，RON95汽油补贴将进行调整，因此收入最高的15%的人将没有资格","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"GDP":1,"SST":1},"content_text":"KUALA LUMPUR: Top-earning Malaysians can expect to pay higher prices for RON95 petrol in the middle of next year as the government unveiled a larger RM421 billion (US$97.8 billion) budget for 2025 on Friday (Oct 18).\nPrime Minister Anwar Ibrahim said the government currently spends RM20 billion a year on blanket subsidies for RON95 petrol, which unfairly benefit the top 15 per cent of earners - as well as foreigners - in Malaysia.\nThis segment accounts for 40 per cent, or RM8 billion, of the petrol subsidies given out, Mr Anwar said, noting that this amount would be better spent on education, healthcare and transportation needs.\n\"The government intends to rationalise subsidies for RON95 petrol in the middle of 2025,\" said Mr Anwar, who is also Finance Minister.\n\"To avoid confusion, I want to stress that the government will continue to subsidise petrol for the other 85 per cent of the population. This means the government will continue to spend RM12 billion on petrol subsidies for the needs of the 85 per cent.\"\nHe did not offer details on how these targeted petrol subsidies will be effected at the pump.\nMeanwhile, subsidies for boarding schools will also be retargeted to remove financial assistance for the country’s top 15 per cent of income earners, while similar reforms will be made to the country’s public healthcare system, Mr Anwar added.\nThe RM421 billion budget for 2025 is an increase from the expansionary 2024 budget of RM393.8 billion last year, which was the largest-ever recorded then. That figure has since been revised to RM407.5 billion, according to the Finance Ministry. \nDevelopment expenditure accounts for RM86 billion of the 2025 spending while the remaining RM335 billion is for the government’s operating expenditure.\n\n\n\n\nConsumer prices are expected to creep up next year as the Malaysian government seeks to trim its hefty subsidy and social assistance bill by removing blanket RON95 petrol subsidies, an unpopular move that it initially held off but ultimately deemed necessary to ease pressure on its coffers amid plans to spend more.\nThe larger budget will fund higher civil servant salaries taking effect in December.\nGovernment revenue is projected to grow by 5.5 per cent to RM339.7 billion, driven by higher direct and indirect tax collections. The country is targeting a further fiscal deficit reduction to 3.8 per cent of gross domestic product (GDP) next year, down from the current target of 4.3 per cent this year. \nMeanwhile, headline inflation for 2025 is expected to tick up to between 2 per cent and 3.5 per cent, the government said, but this remains “manageable”.\n\n\n\n\n\n      File photo of a person pumping diesel at a petrol station in Johor Bahru, Malaysia on Jun 23, 2024. \n    \n\n\n\n\nPETROL SUBSIDIES\nIn its fiscal outlook for 2025, the Finance Ministry said that existing broad-based subsidies have increased the fiscal burden and dampened the government’s ability to invest in more meaningful public goods or infrastructure projects that will spur long-term economic growth.\n“The government will pursue subsidy rationalisation initiatives to address leakages and wastages, while enhancing the social assistance programme,\" it said.\nWhile the government acknowledged this could cause prices to rise, it noted that inflation remained moderate after diesel subsidies were rationalised in June, thanks to targeted cash assistance and subsidies for selected business sectors.\nHeadline inflation is expected to remain “manageable” at between 2 per cent and 3.5 per cent in 2025, it said, up from between the 1.5 per cent to 2.5 per cent projected for 2024.\nIt was previously reported that blanket subsidies for RON95 petrol had made up most of the RM81 billion that Malaysia spent on subsidies in 2023 and are said to unfairly benefit high-income households.\nThe removal of blanket petrol subsidies will contribute to a 14.4 per cent decrease in spending on subsidies and social assistance, projected to be RM52.6 billion in 2025, the Finance Ministry said.\n“This decline is due to the implementation of the electricity subsidy rationalisation and targeted fuel subsidy programmes,” it said.\nAlmost half, or 45.5 per cent, of the RM52.6 billion will be allocated to various social assistance and incentive programmes aimed at supporting vulnerable groups, the ministry added.\nThe projected RM421 billion expenditure - or 20.2 per cent of Malaysia’s GDP - for 2025 is an increase from the revised expenditure of RM407.5 billion in 2024.\nThis is primarily due to higher salaries and retirement charges from implementing the new pay structure for civil servants across all grades, and higher debt service charges, the Finance Ministry said.\nIn the first phase starting Dec 1, lower- and middle-grade employees will receive an 8 per cent salary increase, while upper management will see a 4 per cent raise.\nThe next phase, starting in January 2026, will further boost salaries by 7 per cent for lower- and middle-grade employees and 3 per cent for upper management.\n \n\n\n\n\n\n\n      In the first phase starting Dec 1, lower- and middle-grade employees will receive an 8 per cent salary increase, while upper management will see a 4 per cent raise. (Photo: CNA/Zamzahuri Abas)\n    \n\n\n\n\nHIGHER TAX COLLECTIONS\nMr Anwar also said on Friday that the government will expand the scope of the Sales and Service Tax (SST) to increase revenue but also to make it more progressive and ensure the lower-income are not burdened.\nThe scope of the service tax will be expanded to include commercial services, such as financial services that are based on fees, Mr Anwar said.\n\"The sales tax will not be imposed on basic food items used by the people. It will be imposed on non-essential food items like premium imports, including salmon and avocado,\" he added.\nThe government will meet with stakeholders like affected industries before finalising the expansion of the scope and rate of the SST.\n\"The progressive expansion of the SST's scope will be take effect on May 1, 2025. A part of the revenue gained will be used to enhance cash assistance for the people and improve the quality of education and healthcare,\" Mr Anwar said.\nDirect tax collection in 2025 is projected to increase by 6.6 per cent to RM188.8 billion in anticipation of better income tax collection from the phased implementation of e-invoicing and an improving economic outlook.\nCompany income tax remains the largest contributor to direct taxes, followed by individual income tax, which is estimated to go up by 7.8 per cent to RM44 billion, in line with the stable job market and improved wages, the Finance Ministry said.\nIndirect tax is forecast to rise by 9.8 per cent to RM70.2 billion, with the SST collection making up the bulk of it. The rise is in tandem with the full implementation of the new service tax rate, as well as improving business confidence and consumer sentiment, the ministry said.\nMeanwhile, non-tax revenue is projected to decrease slightly to RM80.7 billion due to lower proceeds from investment income. National oil company Petronas is expected to pay a dividend of RM32 billion in 2025, the same as 2024, amid concerns over lower global oil prices.\n“The government will continue strengthening revenue management, while enhancing efficiency through the use of technological advancements and innovative approaches,” the ministry added.\nThe budget statement will be debated at the policy level for eight days starting Oct 21, followed then by responses from the relevant ministries from Nov 6, according to the calendar posted on the Malaysian parliament portal.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2476409537"}