The subsidy rationalisation programme will be decided on by the government by the fourth quarter this year, for implementation next year, second finance minister Datuk Seri Ahmad Husni Hanadzlah has said, according to a Bernama report.
A decision will also be reached on whether RON 95 petrol and diesel will be exempted from the Goods and Services Tax (GST). GST is scheduled to take effect on April 1, 2015.
Ahmad Husni told the national news agency that in the first year it takes effect, GST is estimated to provide the government with about RM2.5 billion in additional revenue, and RM8 billion in the second year.
He also revealed that the government is looking at a certain salary level to be eligible for the subsidy, citing as an example, those with monthly earnings of RM4,000 and below alongside those who may be earning higher than that, and up to a certain level.
It was announced in Budget 2014 that a 6% GST will replace sales tax and service tax from April 1, 2015, and that transport services like buses, trains, LRT, taxis, ferries, boats and highway tolls would be exempted from GST.
RON 95 petrol and diesel are, at present, exempt from sales tax at rates of 58.62 sen a litre and 40 sen a litre respectively, Bernama quoted deputy finance minister Datuk Seri Ahmad Maslan as saying in an earlier report.