Government Commits To Continuing Fiscal Reforms -- Amir Hamzah
KUALA LUMPUR, Aug 27 (Bernama) -- The government is committed to continuing fiscal reform initiatives, including the Medium-Term Revenue Strategy (MTRS), to enhance revenue collection and review public expenditure, ensuring efficiency and effectiveness.
Finance Minister II Datuk Seri Amir Hamzah Azizan said the government will continue with fiscal consolidation measures to create adequate fiscal space to face any future external shocks.
“Budget 2025 outlines several revenue measures, including expanding sales tax on non-essential premium imported goods and broadening the scope of service tax to cover commercial services such as fee-based financial services,” he told the Dewan Negara today.
Amir Hamzah was responding to a supplementary question from Senator Datuk Wu Him Ven regarding the government’s plans to increase fiscal space and concrete steps to narrow the economic gap between high- and low-income groups.
He said that one of the measures to bridge the economic gap is the targeted and progressive expansion of the Sales and Services Tax (SST), which took effect on July 1, 2025, to ensure that the tax burden is distributed more fairly and borne by those with the ability to pay.
“The government will also optimise public spending, including targeted subsidies for diesel and RON95 fuel, as well as the rationalisation of statutory bodies.
“Reform measures will continue in the national labour market, including increasing the minimum wage from RM1,500 to RM1,700 and implementing progressive wage policies,” he added.
Earlier, Amir Hamzah reiterated that the increase in federal government debt to RM1.304 trillion, or 63.9 per cent of Gross Domestic Product (GDP) by the end of June 2025, compared to RM1.248 trillion or 64.6 per cent of GDP at the end of 2024, is due to the need to finance the fiscal deficit to cover development expenditure (DE).
Meanwhile, the total liabilities of the Federal Government as of the end of March 2025 amount to RM384.6 billion, which includes guarantee commitments of RM238.8 billion and other liabilities of RM145.8 billion, he said.
Amir Hamzah was responding to Senator Datuk Setia Salehuddin Saidin’s question regarding the government’s debt.
Amir Hamzah added that since the MADANI government took over the administration, new borrowings have decreased from RM99.4 billion in 2022 to RM92.6 billion in 2023 and further down to RM76.8 billion in 2024 (a reduction of over RM20 billion in two years).
“The implementation of fiscal reforms under the MADANI government has yielded results with a gradual reduction in the deficit rate from 5.5 per cent (2022) to 5.0 per cent (2023) and further down to 4.1 per cent in 2024,” he added.
-- BERNAMA