Will there be new taxes? Economy minister says ‘I don’t know, frankly’, wait for PM’s announcement Friday

KUALA LUMPUR, Oct 14 — Economy Minister Rafizi Ramli said today that he’s in the dark about whether or not Budget 2025 could see the roll out of new taxes as the Anwar administration seeks to reduce Malaysia’s debt while raising development spending.

Speaking to reporters after addressing an event at World Bank Malaysia’s office here, the Pandan MP played down concerns about how the government plans to close the fiscal gap without new taxes, saying the government can still “optimise” expenditure through savings and tighter rules.

“Anything, we have to wait for PM’s announcement this Friday because I don’t know, frankly speaking.

“At least from the Ministry of Economy’s point of view, we have advocated that the government goes into the public to demonstrate that we are doing everything possible to optimise taxpayers money,” Rafizi said.

Speculation about new taxes was fuelled by analysts’ predictions that Prime Minister Datuk Seri Anwar Ibrahim could announce more measures to raise revenue, including levying inheritances.

Anwar, who is also the finance minister, has repeatedly expressed his commitment to reduce government debt that reached 64 per cent of the country’s gross domestic product last year through “gradual consolidation”.

Today, Rafizi said that the majority of the federal government’s savings could still come from trimming down unnecessary allocations and rationalising subsidies.

“While we acknowledge the need to increase revenue there’s some room for us to optimise spending.

“I think we have been talking about how to sequence (the) rationalisation of government expenditure...we talked about bulk subsidies, blanket subsidies,” he said.

The Anwar administration rolled back blanket diesel subsidies in July and gave the bulk of it directly to middle to low income households and smallholders through cash transfers. It said the move would save the government RM4 billion annually.

Rafizi previously hinted that petrol subsidy rationalisation is set to happen but was not clear about the time frame.

The government also also reduced blanket subsidies for electricity, and said it could expect about RM4.1 billion in savings.

Malaysia is projected to spend RM52.8 billion on subsidies and social assistance this year, down from an estimated RM64.2 billion in 2023.