Why this topic relevant to me?
As we bid farewell to 2024, are you ready to usher in the new year? The Government has established a series of new policies that will take effect in 2025, many of which are closely related to our livelihood. Newsgraphy has curated ten key points that are worth noting, let’s take a look!
Minimum wage to be increased to RM1,700
Starting 1st February, the national minimum wage will increase from RM1,500 to RM1,700.
However, employers with fewer than five employees have a grace period of up to six months, allowing them to delay implementation until 1st August.
Apart from minimum wage, the Government will implement multiple measures to improve employee wages, said Minister of Human Resources, Steven Sim. This includes the publication of starting salary guidelines for the first time, based on Malaysia Standard Classification of Occupations (MASCO) standards.
SST to be expanded to business services and non-essential items
From May 1, the scope of the Service Tax will be extended to include commercial services, particularly businesses that operate on a fee-based model.
Also, Sales Tax will be imposed on non-essential goods, particularly imported premium products such as salmon and avocados. However, essential food items consumed by the people will be exempt from Sales Tax.
FLYsiswa subsidy to be increased to RM400
FLYsiswa subsidy for purchasing flight tickets will be increased from RM300 to RM400 per person, effective Jan 1.
This initiative, introduced in 2023, is part of the Government’s efforts to alleviate the burden on students studying across the South China Sea who face high air ticket prices when returning to their home states.
It is for students who study in the public universities, polytechnics and community colleges, as well as matriculation colleges and Teacher Education Institutes (IPG) under the Ministry of Education (MOE). They can enjoy subsidy for the purchase of flight tickets for domestic routes between Peninsular Malaysia, Sabah, Sarawak and Labuan.
FLYsiswa is implemented through the method of providing shell credit, with local airlines issuing digital vouchers worth RM400 to each eligible student to be redeemed for the purpose of purchasing flight tickets for those routes.
Targeted RON95 fuel subsidy to be implemented in mid-2025
The Government plans to implement targeted subsidies for RON95 petrol in mid-2025.
However, 85% of the population will continue to benefit from subsidies. This means that the price of RON95 will remain at RM2.05 per litre, with around RM12 billion in subsidies allocated to support them. The savings generated from this will be used to enhance the well-being of the majority of the citizens.
The Government has explored the implementation of a two pricing system or the verification of identity cards, but the detailed mechanism is still being studied and formulated.
Sugar Tax to be raised to 90 sen per litre
Malaysia has the highest diabetes prevalence rate in Southeast Asia and sugar is unequivocally one of the major culprits behind the rise in non-communicable diseases (NCDs).
As a measure to strengthen the War on Sugar movement, the Government will increase the sugar-sweetened beverage tax in stages by 40 sen per litre from 1st January 2025 onwards.
That means the tax on sugary drinks will rise to 90 cents per litre from the previous 50 cents per litre.
Revenue gained from this additional collection will be used to cover public health expenses, such as to increase the supply of Sodium-glucose Cotransporter-2 (SGLT-2) inhibitors for diabetes treatment, as well as letting more patients to get Peritoneal Dialysis (PD) treatments for End Stage Kidney Disease (ESKD).
[Interactive] How much sugar do you take in a day? Let’s calculate!
Total allocation of STR and SARA to be increased to RM13 billion
The total allocation for the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), will be amounting to RM13 billion compared to RM10 billion in 2024. This increase will continue to benefit 9 million recipients, equivalent to 60% of the adult population of the country.
With the additional allocation of RM3 billion, STR rate for the single category will be increased to RM600, whereas the maximum amount for households increased to RM4,600 from RM3,700 previously.
Meanwhile, 5.4 million STR recipients, comprising households and single seniors citizen will receive SARA up to RM100 per month, compared to 700,000 recipients in 2024.
EPF’s i-Saraan matching incentive to be increased to 20%
To encourage more informal workers and those who do not have a regular income to save for retirement, the Employees Provident Fund (EPF) i-Saraan matching incentive will be increased to 20%, compared to 15%, subject to a maximum annual matching incentive of RM500 or RM5,000 for life.
Also, the i-Suri Programme will continue as a matching incentive through Government contributions and active contributions from members. Housewives receive a 50% matching subsidy from the Government for every RM1 paid, up to a maximum of RM300 per year, with a lifetime cap of RM3,000.
EPF intergenerational wealth transfer to be introduced
Towards becoming an aging nation, EPF is reviewing its scheme to strengthen the intergenerational transfer approach, allowing part of a member’s EPF savings to be transferred directly into the EPF account of immediate family members.
Income tax relief of up to RM7,000 for three years on interest payments for first-time homebuyers
Here’s a good news for first-time homebuyers!
To encourage first home ownership, the Government will provide individual income tax relief of up to RM7,000 on housing loan interest payment for residential homes priced up to RM500,000; and up to RM5,000 for houses priced between RM500,000 and RM750,000.
This relief is claimed for three consecutive years of assessments on sale and purchase agreements completed between 1st January 2025 and 31st December 2027, starting from the first year in which the housing loan interest is paid.
However, to be eligible for the above tax relief, the relevant residential property must not be used as a source of income.
Progressive Wage Policy to be fully enforced
Progressive Wage Policy is a voluntary programme that aims to increase the wages of Malaysian employees earning between RM1,500 and RM4,999.
Following the pilot project in June 2024, this policy will be fully enforced from June 2025, with an allocation of RM200 million, benefiting 50,000 workers.
It covers local workers in five key economic sectors, including construction, manufacturing, wholesale and retail trade (including motor vehicle and motorcycle repair), information and communication, and professional, scientific, and technical activities.
Through this policy, the Government aspires to raise the wage share of national income from 32.4% in 2022 to 45% by 2033.
Research, Data Visualisation and Written By: Ginson Lim
Edited and Translated by: Dexter Chan
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