The targeted fuel subsidy mechanism to be implemented in June is likely to benefit those whose household income is below RM4,000 a month, said Deputy Finance Minister Ahmad Maslan.

"It's almost confirmed that those who receive 1Malaysia People's Assistance (BR1M), with their monthly household of RM4,000 and below can receive the subsidy," he told a press conference after a GST briefing in Bangi, Selangor.

"The middle class will be given a partial subsidy," he said, adding that the high income group will pay the RON95 petrol according to market price.

However he said his ministry and the Domestic Trade, Cooperatives and Consumerism Ministry are still finalising the method of implementation.

Meanwhile, Ahmad Maslan said the implementation of GST will have a minimal impact of 1.08 percent increment on the consumer price index (CPI) due to changes in the taxation system.

According to Bank Negara, the impact on inflation and CPI was one off and temporary, and it will drop to two or three percent by the end of next year.

While some were angry at Najib Abdul Razak for retracting 20 sen of the subsidy, Ahmad Maslan however viewed this in another perspective.

 

"In the social media, Najib was accused of 'janji dicapati' instead of 'janji ditepati'. They said this was against his promise made before the last general election," he told some 700 civil servants.

 

"But he didn't increase the fuel price to surpassing the market price, the government still subsidised the fuel by RM0.28 per litre," he argued.

 

There were two type of RON95 petrol prices in Malaysia - RM2.30 and RM2.58 per litre as subsidised by government and real market price respectively, he said.

He said the real market price has reduced from RM2.80 to RM2.58 following the worldwide plunge of fuel price.

'Sponsoring three months' food expenses’

"The cutting of the fuel subsidy has been greeted with criticism as though there were no good things offered by the government," he said, citing that six other items was subsidised, BR1M (RM950), which was equivalent to the government sponsoring three months’ food expenses in the kampung, and others.

 

"The three months kitchen foods expenses (in kampung households) was sponsored by BN," he emphasised.

"Where else can you find a government as good as Malaysia throughout the world ?" he asked.

At the end of the briefing, he asked the attendees to stand up and shout that they supported GST.

Meanwhile, Ahmad Maslan urged the Consumerism Ministry to order the hotels and restaurants to change their service charges to 'hotel charges' and 'restaurant charges', to curb the perception that the charges was taxed by the government.

He also opined that medical charges shouldn't increase, even though medical devices were taxed under GST, where they were currently taxed under the sales and service tax.

 

He also said the government will announce if credit card payments will be taxed under GST.

 

China Press had reported that the government may abolish the RM50 annual service tax in credit card payment which was imposed in 2010 to curb credit card debt, and have it replaced with six percent GST.

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