Targeted Subsidies: Need For Stronger Identification - Experts

BANGI, Nov 12 (Bernama) -- The government's effort to design more effective targeted subsidies so that aid reaches the right people requires a robust identification system.

The director of the Malaysian Inclusive Development and Advancement Institute (MINDA) at Universiti Kebangsaan Malaysia (UKM), Prof Tan Sri Dr Noor Azlan Ghazali, said as such, the government needs to convince the people of the need for a robust identification system that allows targeted subsidies to be implemented in a more organised and smooth way.

"I am very inclined to encourage and propose to the government that every Malaysian should declare their income to the Inland Revenue Board (LHDN), regardless of whether they must pay tax or not. We want the people to declare their income.

"Because our current input is basic. Declaring (income at) the Central Database Hub (PADU) system, some declare, some don't because it's not a law, and some declare incorrectly so there's no way of validation," he said.

Noor Azlan said this in the talk programme 'Bicara Persada – Subsidi Bersasar: Harapan dan Realiti' at UKM here today.

He said the income declaration step is crucial in ensuring that the primary data is more accurate, complete and can be verified, especially in channelling targeted aid to those who need it.

He expressed concern over exclusion errors, which could prevent deserving people from receiving assistance.

"Measures such as cash transfer can be looked into to facilitate direct assistance to the targeted group, but with a strong identification method to reduce the risk of assistance being received by those who are not eligible," he also said, expressing his support for the government's efforts to rationalise subsidies so they are not misused or burdensome to the national economy.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid did not rule out the possibility of using the MyKad or MySejahtera application as an instrument for channelling targeted subsidies.

The technology of these two platforms was proven efficient, especially during the COVID-19 pandemic, he said, echoing Noor Azlan's proposal that all citizens declare their income to the LHDN to facilitate aid distribution.

He said this step could ensure that the economy is more "white" by including each aid recipient in the government's official records.

"Mandatory declaration of income can help the government in ensuring that aid is only given to those who deserve it, thus simplifying the process of giving assistance," he explained.

-- BERNAMA