The RON 95 petrol subsidy rationalisation would be the authorities’s focus this yr earlier than a carbon tax is launched in 2026, in accordance with second finance minister Datuk Seri Amir Hamzah Azizan. First introduced throughout Funds 2025the carbon tax shouldn’t be a CO2-based street tax like in different international locations, however is focused at iron and metal, and power industries, with the income getting used to fund inexperienced analysis and expertise programmes.
As reported by The SolarAmir famous that Malaysia should first handle the difficulty of gasoline subsidies, notably these involving the power sector, earlier than implementing the carbon tax. “As we embark on this transition, we should be sure that no unintended penalties are embedded inside our system. As an example, Malaysia has but to implement a carbon tax as a part of its coverage framework. Whereas it’s scheduled for rollout by 2026, there are necessary precursor steps we should take,” he mentioned.
“One main problem is the prevailing distortions within the system, particularly the subsidies offered to the power sector. A key goal now could be to start scaling again these subsidies. It doesn’t make sense to impose taxes on one facet whereas concurrently offering subsidies for petrol, diesel and different fuels,” he added.
Amir additionally emphasised that subsidy rationalisation is a vital step towards establishing a powerful basis for constructing sustainable mechanisms and coverage frameworks. “In consequence, we are able to anticipate the introduction of structured measures, together with local weather motion frameworks, strong measurement instruments, and finally, the implementation of a carbon tax to assist these initiatives,” he defined.
“If we would like this transition to be sustainable and impactful, the whole system should reply. It can’t be pushed by remoted bulletins or standalone insurance policies. The problem for the federal government is to tie every part collectively coherently and successfully,” he continued.
In one other associated report by NSTAmir defined that market distortions similar to blanket subsidies should be addressed earlier than a carbon tax will be applied. “There are distortions taking place inside Malaysia’s system at this time as a result of we now have offered blanket subsidies, which is an enormous problem,” he mentioned.
“We noticed good behavioural change (following the diesel subsidy rationalisation final yr). Malaysia was not a budget vacation spot for folks to supply subsidised gasoline for smuggling. We additionally modified the way in which diesel is provided to industries to forestall folks from taking gasoline meant for the general public and utilizing it for industrial operations,” he added
Yesterday, prime minister Datuk Seri Anwar Ibrahim mentioned the RON 95 petrol subsidy rationalisation programme will proceed as deliberateincluding that it could not have an effect on 85% to 95% of the inhabitants.
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