Kuala lumpur: The government is steadfast in its commitment to continuing fiscal reform initiatives, including the Medium-Term Revenue Strategy (MTRS), aimed at enhancing revenue collection and reviewing public expenditure to ensure efficiency and effectiveness.
According to BERNAMA News Agency, Finance Minister II Datuk Seri Amir Hamzah Azizan emphasized the government's commitment to fiscal consolidation measures to create adequate fiscal space to withstand any future external shocks. During a session at the Dewan Negara, Amir Hamzah outlined key revenue measures in Budget 2025, such as expanding sales tax on non-essential premium imported goods and broadening the scope of service tax to include commercial services like fee-based financial services.
Responding to a supplementary question from Senator Datuk Wu Him Ven about the government's plans to increase fiscal space and address economic disparities, Amir Hamzah highlighted the targeted and progressive expansion of the Sales and Services Tax (SST) initiated on July 1, 2025. This measure aims to ensure that the tax burden is distributed more equitably, being borne by those with the capacity to pay.
Amir Hamzah also mentioned that the government plans to optimize public spending through targeted subsidies for diesel and RON95 fuel, along with the rationalization of statutory bodies. Furthermore, reform measures in the national labor market will continue, including raising the minimum wage from RM1,500 to RM1,700 and implementing progressive wage policies.
Earlier, Amir Hamzah addressed the federal government's debt increase to RM1.304 trillion, or 63.9 percent of GDP by the end of June 2025, compared to RM1.248 trillion or 64.6 percent of GDP at the end of 2024. This increase is attributed to the need to finance the fiscal deficit and cover development expenditure.
In response to a question from Senator Datuk Setia Salehuddin Saidin regarding government debt, Amir Hamzah revealed that as of the end of March 2025, the Federal Government's total liabilities amounted to RM384.6 billion, including guarantee commitments of RM238.8 billion and other liabilities of RM145.8 billion.
Amir Hamzah noted that since the MADANI government assumed office, there has been a decrease in new borrowings from RM99.4 billion in 2022 to RM92.6 billion in 2023, and further down to RM76.8 billion in 2024, marking a reduction of over RM20 billion in two years. He added that the implementation of fiscal reforms under the MADANI government has led to a gradual reduction in the deficit rate from 5.5 percent in 2022 to 5.0 percent in 2023, and further to 4.1 percent in 2024.