Latest news with #fiscalreform
Malay Mail
10 hours ago
- Business
- Malay Mail
‘We collect taxes to return them to the people': PM justifies SST expansion, says Malaysians to benefit through welfare aid
PUTRAJAYA, June 20 — Prime Minister Datuk Seri Anwar Ibrahim has today assured the public that his administration's fiscal reform will not compromise the welfare of the majority. Speaking to Finance Ministry staff, he said that broadening the tax base by expanding the Sales and Services Tax (SST) will instead allow Putrajaya to enhance its assistance and services for Malaysians. 'In Malaysia, subsidies are given to everyone, even foreigners, those who don't pay taxes, and the wealthy earning RM1 million a month receive electricity subsidies,' he said in his speech at the Finance Ministry monthly assembly here. 'What we're doing now is removing those subsidies, making them pay the actual cost while allowing Tenaga Nasional Berhad to earn a reasonable profit. Through this, we save RM4 billion. 'And what is that RM4 billion for? It goes to the schools and hospitals,' he added. Anwar cited targeted aid initiatives such as the Rahmah Cash Aid (STR) and Sumbangan Asas Rahmah (SARA) as key examples of how public funds are being channelled back to those who need them most. 'What are we collecting billions in taxes for? As everyone knows, the total allocation for STR and SARA amounts to RM13 billion and benefits nine million people. 'So this is our reasoning, we collect these taxes and return them to the people,' he said. Anwar also said that the Ministries of Education and Health have received increased allocations in the current budget as part of efforts to enhance the country's education and healthcare systems. 'That's why in deciding on this matter, we need to look at it from a macro perspective. If we look at past budgets, there were some good elements, but the significant increase in allocations for health and education reflects our priorities,' he said. Earlier this month, the Ministry of Finance announced the implementation of revised SST rates and expanded scope of the Service Tax effective July 1, 2025 to strengthen the country's fiscal position by increasing revenue and broadening the tax base. However, the announcement has since faced criticism from various quarters, with calls to delay its implementation over concerns that it could worsen the cost of living and place additional pressure on small businesses amid fragile economic conditions.
Malay Mail
11 hours ago
- Business
- Malay Mail
‘We collect taxes to return them to the people': PM justifies SST expansion, says Malaysians to benefit through welfare benefits
PUTRAJAYA, June 20 — Prime Minister Datuk Seri Anwar Ibrahim has today assured the public that his administration's fiscal reform will not compromise the welfare of the majority. Speaking to Finance Ministry staff, he said that broadening the tax base by expanding the Sales and Services Tax (SST) will instead allow Putrajaya to enhance its assistance and services for Malaysians. 'In Malaysia, subsidies are given to everyone, even foreigners, those who don't pay taxes, and the wealthy earning RM1 million a month receive electricity subsidies,' he said in his speech at the Finance Ministry monthly assembly here. 'What we're doing now is removing those subsidies, making them pay the actual cost while allowing Tenaga Nasional Berhad to earn a reasonable profit. Through this, we save RM4 billion. 'And what is that RM4 billion for? It goes to the schools and hospitals,' he added. Anwar cited targeted aid initiatives such as the Rahmah Cash Aid (STR) and Sumbangan Asas Rahmah (SARA) as key examples of how public funds are being channelled back to those who need them most. 'What are we collecting billions in taxes for? As everyone knows, the total allocation for STR and SARA amounts to RM13 billion and benefits nine million people. 'So this is our reasoning, we collect these taxes and return them to the people,' he said. Anwar also said that the Ministries of Education and Health have received increased allocations in the current budget as part of efforts to enhance the country's education and healthcare systems. 'That's why in deciding on this matter, we need to look at it from a macro perspective. If we look at past budgets, there were some good elements, but the significant increase in allocations for health and education reflects our priorities,' he said. Earlier this month, the Ministry of Finance announced the implementation of revised SST rates and expanded scope of the Service Tax effective July 1, 2025 to strengthen the country's fiscal position by increasing revenue and broadening the tax base. However, the announcement has since faced criticism from various quarters, with calls to delay its implementation over concerns that it could worsen the cost of living and place additional pressure on small businesses amid fragile economic conditions.
Free Malaysia Today
2 days ago
- Business
- Free Malaysia Today
Fiscal reforms aimed at boosting public finances, protecting low-income groups
Treasury secretary-general Johan Mahmood Merican assured the public that the government is working to ensure that essential daily goods remain unaffected by the expansion of the sales and service tax. (Facebook pic) PETALING JAYA : The government's fiscal reform efforts, including the sales and service tax (SST) and the rationalisation of electricity and diesel subsidies, are aimed at strengthening public finances while protecting low-income groups and key economic sectors. Treasury secretary-general Johan Mahmood Merican today acknowledged recent public discussions on the SST expansion and said that the government was working to ensure that essential daily goods remain unaffected, reported Bernama. Speaking at the Sasana Symposium 2025 hosted by Bank Negara Malaysia, Johan stressed the need to broaden the country's tax base to ensure sustainable expenditure as well as to meet growing demands for social protection and basic infrastructure. 'We need to increase our tax base as our tax-to-GDP (ratio) is about 12.5%, which is among the lowest in this region,' he said. 'How do we then try to approach it more progressively? It is the government that needs to provide additional funding.' Johan also emphasised the importance of targeted subsidies and assistance, saying that providing the same aid to both high- and low-income groups undermines equity. He highlighted the increase in government cash assistance, with Sumbangan Tunai Rahmah (STR) rising from RM10 billion in 2024 to RM13 billion this year, and the inclusion of Sumbangan Asas Rahmah. He said while a progressive wealth tax was appealing and aligned with Islamic principles such as zakat, it presented major challenges in terms of administration, enforcement, and data availability. He said that income and consumption taxes were easier to manage due to the regular and traceable transactions, whereas wealth was harder to assess and value. 'I think the real challenge – and it is not just a Malaysian issue – is that it is quite challenging to administer a wealth tax compared to an income tax,' he added. Last week, the finance ministry announced that zero tax rates would remain for essential goods, while a rate of 5% to 10% would be imposed on non-essential items from July 1. The scope of the service tax will be expanded to cover rental, leasing, construction, financial services, and private healthcare and education services. Under the new tax regime, a 6% service tax will be imposed on construction services for infrastructure, commercial, and industrial buildings if the taxable value exceeds RM1.5 million annually. The same rate applies to private healthcare, traditional and complementary medicine, and allied health services provided to foreigners, on service providers exceeding the RM1.5 million threshold. Services directly impacting Malaysians such as public and some private healthcare will continue to be exempted from the service tax.
Free Malaysia Today
13-06-2025
- Business
- Free Malaysia Today
Broader SST to fund essential support for B40 and M40, says Treasury sec-gen
Treasury secretary-general Johan Mahmood Merican said the SST expansion is part of a long-term fiscal reform plan under the Madani economic framework aimed at restructuring the national economy. (Bernama pic) KUALA LUMPUR : Treasury secretary-general Johan Mahmood Merican says 5.4 million Malaysians in lower- and middle-income households stand to benefit from an expansion to the sales and service tax (SST) regime, set to kick in on July 1. In an exclusive interview with FMT, Johan said the expected boost in revenue will allow the government to scale up its financial assistance to members of the B40 and M40 income groups, such as the monthly Sumbangan Asas Rahmah (Sara). The number of recipients for the Sara programme has expanded significantly to 5.4 million since April, compared to just 700,000 previously. 'As the prime minister highlighted in his 2025 budget speech, increasing government revenue is essential to enhancing services for the rakyat. 'This expansion of the SST is driven by three primary objectives: improvement of services to the people, responsible fiscal management and making fiscal space to face global uncertainty,' Johan said. He also said that the government has taken various measures to safeguard the B40 and M40 groups from the adverse effects of the SST adjustments. Crucially, he said, the finance ministry has ensured that the SST expansion targets only non-essential goods and services, ensuring that daily expenditure for families in the B40 and M40 groups remain largely unaffected. This fiscal management is part of the Madani economic reform agenda, with a focus on reducing the deficit from 5.5% in 2020 to a targeted 3.8% in 2025. Putrajaya is also directing additional spending towards healthcare—allocating over RM1 billion for permanent contracts and RM400 million to upgrade dilapidated clinics, as well as making further investments to improve schools and rural infrastructure. 'The ministry focuses on daily necessities—there is also an element of evaluation,' said Johan. Essential items like unprocessed foods (chicken, meat, local vegetables, rice), basic processed foods (flour, sardines, sugar, bread, milk, palm cooking oil), medicines and books will continue to be exempt from SST (0%). Elaborating on the classification, Johan explained that the government differentiates between daily necessities and optional goods. While basic items like sardines, tongkol, and kembung remain at 0% SST, premium items such as imported fruits and premium seafood like salmon, cod, and king crab will be subject to a 5% SST. 'Optional goods with alternatives are subject to 5% SST, such as electrical appliances and processed foods like jam,' he added. Local fruits are not subjected to sales tax, with only imported fruits incurring a 5% tax. Johan expressed hope that the exemptions given would encourage the consumption of local produce. The domestic trade and cost of living ministry also actively monitors prices to prevent profiteering, with increased enforcement activities and the provision of affordable alternatives through Jualan Rahmah and Agro Madani. Addressing concerns about potential inflation due to profiteering, Johan assured that the ministry will intensify its monitoring of prices at retail outlets and supermarkets. The government has clarified that the current SST adjustment will not see any increase in the SST rate, currently set at 0%, 5%, and 10%. Instead, it seeks to expand the scope of the tax, shifting certain optional goods from 0% to 5%. Unlike the Goods and Services Tax (GST), the SST remains more targeted, minimising the burden on lower-income individuals. For instance, service tax on work and education is primarily levied on non-citizens, with the tax imposed on private schools fees which exceed a set threshold. Johan described the SST expansion as part of a broader, long-term fiscal reform plan under the Madani economic framework aimed at restructuring the national economy and improving the welfare of Malaysians.
Daily Mail
02-06-2025
- Business
- Daily Mail
Elon Musk hammers large-scale government spending
Elon Musk says most of the savings made by the Department of Government Efficiency (DOGE) will be wiped out within a year by President Donald Trump's freshly unveiled 'big, beautiful bill.' Musk made the astounding comments during a blistering interview aired on Sunday despite initially declaring he only wanted to avoid discussing 'presidential policy' and stick to 'spaceships'. In a previously released clip last week, Musk took aim at Trump's bill saying that he didn't think it could be both big and beautiful - just one or the other. Speaking just days after officially leaving his advisory post, Musk warned that Trump's sweeping legislation would quickly obliterate the fiscal reforms DOGE had fought for. 'I was, like, disappointed to see the massive spending bill, frankly, which increases the budget deficit, doesn't decrease it, and undermines the work that the DOGE team is doing,' Musk told CBS Sunday Morning. The 'big, beautiful bill,' hailed by Trump as the keystone of his second-term agenda, proposes $5 trillion in tax cuts alongside aggressive new spending hikes, lifting the debt ceiling by more than $4 trillion over two years. Despite its ambitions, reshaping tax law, overhauling immigration policy, and slashing Medicaid benefits in the future, Musk believes the bill is fundamentally at odds with the hard choices DOGE made to streamline government. 'I actually thought that, when this "big, beautiful bill" came along, it'd be like, everything he's done on DOGE gets wiped out in the first year,' CBS reporter David Pogue said bluntly. 'I think a bill can be big or it can be beautiful... but I don't know if it could be both. My personal opinion,' Musk laughed. It was a rare, public rebuke of Trump from Musk - a man once dubbed the president's 'first buddy' and hailed on the campaign trail as a 'truly incredible guy' by Trump himself. Musk spent $288 million supporting Trump's election and became a fixture at the White House, invited into Cabinet meetings and leading the charge to slash federal bureaucracy with DOGE's chainsaw-wielding fervor. But after months of political warfare, Musk's relationship with Washington, and with Trump, has cooled. Lawsuits and protests coupled with a 71 percent crash in Tesla profits followed DOGE's drastic cuts which saw 250,000 federal workers either fired or bought out across every federal department. Musk saw grants slashed and staffing culled at environmental agencies including the EPA and NOAA, despite decades of warning about the risks of climate change. Musk's personal net worth shrank by $100 billion, whilst government workers blamed DOGE for everything from Social Security delays to shuttered national parks. 'It's a bit unfair because DOGE became the whipping boy for everything,' Musk said. 'If there was some cut, real or imagined, everyone would blame DOGE. 'I've had people think that, like, somehow, DOGE is going to stop them from getting their Social Security check which is completely untrue,' he went on. 'We became essentially the DOGE boogeyman, where any cut anywhere would be ascribed to DOGE,' he said. Originally touting a $2 trillion savings goal, Musk later revised his target to $1 trillion. In the end, Musk claims DOGE managed to slash an estimated $175 billion before his departure - a far cry from his lofty ambitions. Yet now, with Trump's bill promising $3.8 trillion in added debt over the next decade, Musk believes even those savings would essentially be rendered meaningless. 'We do expect, over time, to achieve a trillion,' Musk explained on Friday during his farewell press conference, but it was also clear he knew that a huge wave of fresh spending would overwhelm any of DOGE's victories. Musk's departure came after CBS previewed the interview in which he criticized the bill in a clip that quickly went viral and reached the Oval Office within hours. The timing was no coincidence: Musk's formal 130-day stint as a 'Special Government Employee' was over - yet until that moment, Musk seemed to imply that he would continue contributing to White House efforts part-time. At an Oval Office farewell event on Friday, both men tried to downplay the rupture. Trump presented Musk with a ceremonial gold key, praising him as a 'very special person.' 'Elon's really not leaving,' Trump said. 'He's going to be back and forth, I think. I have a feeling. DOGE is gonna continue, just as a way of life,' Musk told CBS. 'I will have some participation in that, but as I've said publicly, my focus has to be on the companies at this point.' Sporting a noticeable black eye that he claimed to have received from a playful punch by his son 'Little X' he also made sure to praise the president one last time. The DOGE team is doing an incredible job. They're going to continue doing an incredible job, and I will continue to be visiting here and be a friend and advisor to the president,' Musk said. Despite the highly choreographed moment, there still appeared to be some tension. 'My frank opinion of the government is that it's just like the DMV that got big, okay?' Musk told CBS. 'When you say, "Let's have the government do something," you should think: "Do you want the DMV to do it?" 'It's not like I agree with everything the administration does. But we have differences of opinion. There are things that I don't entirely agree with. But it's difficult for me to bring that up in an interview because then it creates a bone of contention,' Musk explained. 'So then, I'm a little stuck in a bind, where I'm like, well, I don't want to, you know, speak up against the administration, but I also don't want to take responsibility for everything this administration's doing.' Following the CBS interview, Musk returned to SpaceX's Texas headquarters, where he attended the ninth test launch of Starship. As the massive rocket spiraled out of control and disintegrated upon re-entry, some observers couldn't help but note the symbolism. 'I can't guarantee success, but I can guarantee excitement,' Musk noted dryly.
