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Deputy finance minister: T20 subsidy cancellation govt’s attempt to correct past mistake
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Publish date: Fri, 26 May 2023, 04:25 PM
PUTRAJAYA, May 26 — Deputy Finance Minister I Datuk Seri Ahmad Maslan today said that the government’s move to stop several subsidies for the top earners in Malaysia was an attempt to rectify its past policy mistakes.
Speaking to reporters at the launch of Malaysia’s Sustainable Investing Standards (SIS) document, Ahmad Maslan said that the current government was one that was responsible and did not want to just be popular.
“I can say that the policy of giving blanket subsidies was a policy mistake.
“Everyone would agree that the poor would need more subsidies than the rich. But in Malaysia the rich have been getting more than the poor,” he said at the Ministry of Finance here.
This comes after the government earlier this month announced that the top 20 per cent of earners, known as the T20, will soon stop getting subsidies for fuel, electricity and the Haj pilgrimage.
To note, Economy Minister Rafizi Ramli announced last Friday that the government is planning to move away from using the B40 (bottom 40 per cent), M40 (middle 40 per cent) and T20 income classifications to make decisions on matters such as subsidies.
Rafizi said that the government will instead be implementing a metric using “household net disposable income”.
https://www.malaymail.com/news/malaysia/2023/05/26/deputy-finance-minister-t20-subsidy-cancellation-govts-attempt-to-correct-past-mistake/71048
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Be the first to like this. Showing 4 of 4 comments
Yes, SSPN failed without the tax relief! What the current government will do to make it a success without? Better performance and being managed by professional? Also stopping the so called "leakage" which cost the government $250M and benefited 400K taxpayers which quite obviously majority of them are from T20.........
2023-05-28 00:17
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Does the current government really firm in reducing the "benefits" for the T20??? I think the first attempt have failed which was the Tax Relief U-Turn on saving into SSPN Prime.
The dividend of SSPN was higher than 4% in 2013 and 2014 at 4.25%; lowest in 2010 at 2.5% only. After 2014, it stayed at 4% and drop to 3% for the last couple of years. These return was just not sweet enough to attract savers. However, with the Tax Rebate, those with Taxable income of $70K and above can see their tax reduce by 21% or more of the amount saved in SSPN Prime subject to the limit set. This in my opinion is the real sweetener!
Considering the potential "Bank Run" without the tax relief on SSPN Prime, does the current government thought thru in detail and ways to address the impact? The Tax Relief was extended to 2024 and we shall see what lies in Budget 2025 which is less than 1.5 years away.
2023-05-27 18:49