KUALA LUMPUR: The government is in the final stages of preparing the RON95 subsidy rationalisation, set to begin in the second half of this year, Finance Minister II Datuk Seri Amir Hamzah Azizan announced today.
Speaking at the Invest ASEAN-Malaysia Conference 2025, he stressed that the move aims to prevent leakages and ensure wealthier individuals and businesses contribute fairly.
“This will allow fiscal strength to secure subsidies for those who truly need them,“ he said.
The approach mirrors the recent diesel subsidy rationalisation, part of broader efforts to strengthen public finances. The government also plans to expand the Sales and Service Tax (SST) to diversify revenue streams.
Amir Hamzah highlighted Malaysia’s progress in fiscal consolidation, with the budget deficit-to-GDP ratio improving to 4.1% last year, beating the 4.3% target. The goal for 2025 is a 3.8% deficit, aligning with the Public Finance and Responsibility Act 2023’s medium-term target of 3%.
“Revenue-enhancing measures, tax efficiency, and compliance will help achieve this,“ he said. The SST expansion is expected to generate RM10 billion despite recent exemptions.
Looking ahead, Budget 2026 and the 13th Malaysia Plan (13MP) will focus on pragmatic policies to ensure economic stability and fairness.
“Reforms in judicial, fiscal, and social sectors will support growth and resilience amid global volatility,“ he added.
