PETALING JAYA, October 18 – In a significant move, the Malaysian government will implement targeted subsidies for RON95 petrol starting mid-2025. This initiative is part of the newly unveiled RM421 billion federal budget for 2025, which marks a RM27.2 billion increase from last year and is the first budget to surpass the RM400 billion mark. Of the total, RM335 billion will go towards operational expenditure, with RM86 billion allocated for development, including RM6.7 billion for Sabah and RM5.9 billion for Sarawak.
The targeted RON95 subsidies aim to streamline public expenditure while ensuring that only eligible groups benefit from subsidized fuel, in line with the government’s broader fiscal reforms. This new subsidy framework will help balance the need for public support with responsible budgeting, as Malaysia continues to focus on reducing its fiscal deficit.
Other key highlights of the budget include a 2% tax on dividend income exceeding RM100,000 starting in 2025, the expansion of the Sales and Service Tax (SST) to cover more commercial services, and the removal of sales tax on basic food items from May 2025.
