On the latest episode of the Keluar Sekejap podcast, Shahril suggested that a cash transfer would be a better way to reduce the risk of leakages.
“Unless there’s a way – and this might be a bit complicated – where the cash rebate is adjusted monthly based on how much you spend, instead of giving a fixed amount.
“It would work like the goods and services tax, where you could claim it back. Is there any way to implement that? But overall, it’s a simpler and lower-risk method compared to using the identity card (IC),” he said.
Last Friday, transport minister Loke Siew Fook said one of the proposals being discussed for implementing the RON95 targeted subsidies involves a system where eligible Malaysians would need to produce their ICs at petrol stations to verify eligibility before paying the subsidised price.
He said this means there will be two pricing mechanisms – one for eligible Malaysians and the other for the top 15% earners (T15) and foreigners.
Shahril said that the identification system was “nice in theory” but would still be prone to abuse, such as when irresponsible parties use other people’s ICs to fill up their own vehicles. Secondly, he said, it would be more time consuming with the verification step.
He initially suggested a one-off cash transfer to eligible Malaysians to ensure they are in a cash flow positive position. After that, the government would only need to top up the cash aid intermittently.
His co-host, former health minister Khairy Jamaluddin, however, pointed out that the government was wary of the psychological effect on the people if they have to pay full market price at point of sale. “They want to be able to pay the subsidised price upfront,” he said.
“In their view, there’s a disconnect between what they receive from the government and what they pay.
“If we’re being honest, the Bantuan Rakyat 1Malaysia (BR1M) was introduced to help people adjust to subsidies being reduced, but people came to rely on it as an entitlement and forgot that it was the government’s effort to help cushion the impact,” said Khairy, who is a former Umno Youth chief.
In tabling the 2025 budget, Prime Minister Anwar Ibrahim announced that the RON95 targeted subsidies would be implemented from mid-2025. He, however, stressed that 85% of the rakyat would continue to benefit from government subsidies, estimated at RM12 billion.
Tax on dividend income
Shahril said the new 2% tax on dividend income exceeding RM100,000 earned by individual shareholders could encourage Malaysians to invest in foreign shares instead of local ones, as the tax does not apply to dividend income received from abroad.
“Maybe not many would do that, I don’t want to over-dramatise the issue but there will be some (who decide to do so),” he said.
He added that the new tax could be a signal to young entrepreneurs to set up businesses abroad due to the lower corporate tax treatment. For instance, in Singapore, the rate is 18% compared to 24% in Malaysia.
Khairy pointed out that there were other initiatives announced in the 2025 budget that could possibly balance out this new tax, including the introduction of a New Investment Incentive Framework, with RM1 billion in investment funds to be allocated to train local talent and encourage high-value activities.
Khazanah Nasional Bhd, under its National Fund-of-Funds programme, will also provide RM300 million to support startups.