KUALA LUMPUR: Malaysia can no longer delay structural reforms, including targeted fuel subsidies and tax overhauls, Prime Minister Datuk Seri Anwar Ibrahim said.
Delivering the keynote address at the Sasana Symposium 2025 hosted by Bank Negara Malaysia (BNM), Anwar said blanket fuel subsidies, particularly for RON95, were benefitting the rich and even foreigners, at the expense of government resources that should be channelled to the needy.
"We must understand that a subsidy for the poor is necessary. But a subsidy for the rich, for those who can afford it, and for foreigners who do not pay taxes, it's irrational. This is why we are moving to a more targeted model," he said.
Anwar also highlighted tax reform as another "unpopular but necessary" agenda to widen Malaysia's narrow revenue base.
He said that while demands on public spending are rising, driven by healthcare, education, and digital transformation, there remains resistance to increasing or broadening taxes, even among the wealthy.
"To paraphrase Hamlet, to tax or not to tax. Now, you have to expand the revenue base. We want to ensure quality education and improved healthcare and address new challenges such as emerging technologies and digitalisation. All of these will require increased funding and greater resource allocation.
"But nobody wants to pay, including the very rich. That is our challenge, therefore. "Tax reform is a necessity to expand the revenue base, improve enforcement and address leakages without burdening the poor," Anwar said.
In line with Malaysia's aspiration to become a high-income nation, Anwar emphasised the importance of human capital upliftment, especially amid growing investments from global tech giants such as Infineon, Nvidia, Google, and AMD.
"To support this growth, we must strengthen our talent pipeline. This includes technical and vocational training, digital upskilling, and labour market reforms," he said, adding that collaboration across government agencies and the private sector is crucial to developing a future-ready workforce.
As Malaysia faces rising global headwinds and navigates geopolitical uncertainty, Anwar said structural reform is essential—not just for headlines, but to unlock long-term economic potential, reduce inequality and build buffers against external shocks.
The prime minister also launched the Digital Asset Innovation Hub during the event, which he described as a key step in future-proofing Malaysia's financial ecosystem.
The hub will enable innovators to test use cases like programmable payments, stablecoins, and supply chain financing in a controlled regulatory environment.
"This collaboration between regulators and industry players ensures that policy evolves with innovation. We are not just adopting technology for its own sake but building systems rooted in trust and transparency," he said.
He added that Malaysia's efforts in digitalisation, tax reform, and talent development must be seen as a whole-of-nation shift toward economic resilience under the Madani economic framework.
Source: https://www.nst.com.my/business/economy/2025/06/1231865/anwar-malaysia-must-push-ahead-fuel-subsidy-tax-reforms-bttv