The Malaysian government is scheduled to begin rationalising the RON95 fuel subsidy in the latter half of 2025, as confirmed by the Second Finance Minister, Datuk Seri Amir Hamzah Azizan. This step forms part of ongoing efforts by the Ministry of Finance (MoF) to fine-tune subsidy allocations and ensure aid reaches the appropriate recipients.
During an event at the Malaysian Institute of Accountants (MIA) International Accountants Conference 2025, Amir Hamzah highlighted that while the process of subsidy rationalisation will continue, the immediate priority lies in accurately identifying the groups eligible for these subsidies. Discussions led by Prime Minister Datuk Seri Anwar Ibrahim and the Cabinet are underway to raise the eligibility threshold, meaning only those within the defined criteria will benefit from the subsidies.
The minister also revealed that the government is exploring the possibility of using the national identification card, MyKad, as a tool for implementing targeted subsidies. The rationale behind this approach is rooted in the success of MyKad’s use in the Sumbangan Asas Rahmah (SARA) program, which demonstrated effectiveness in distributing aid. The Finance Ministry is currently working to strengthen the system, ensuring a more efficient subsidy adjustment process tied to RON95 fuel.
In addition to the subsidy topic, Amir Hamzah addressed concerns related to the Sales and Services Tax (SST) expansion. Industry players have urged the government to delay its implementation. The minister assured that the government is taking feedback seriously and has engaged with stakeholders to review the proposed changes. The ongoing dialogue aims to balance the interests of all parties affected by the tax policy.
The announcement of the subsidy rationalisation timeline and the focus on refining eligibility criteria underscore the government’s intent to streamline fuel subsidies while responding to economic and social considerations. By integrating digital identification systems like MyKad, authorities hope to enhance subsidy targeting, preventing leakages and ensuring support reaches those who need it most. Meanwhile, careful deliberation on SST matters reflects a willingness to adapt policies based on stakeholder input.
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