Removing petrol subsidies for top tax payers in Malaysia unfair says netizens

MALAYSIA: Economist Ahmed Razman Abdul Latiff suggested limiting the BUDI95 fuel subsidy to Malaysia’s B40 and M40 groups, potentially saving Putrajaya RM1.5 billion monthly. He noted that the T20 consumes over 30% of RON95 subsidies, arguing that restructuring would better target those in need. Fellow economist Afzanizam Abdul Rashid also urged rationalisation, proposing reduced quotas for high‑income users.

In Malaysia, the B40 category refers to households earning below RM3,000 (S$966) monthly. The M40 group includes households earning under RM7,000 (S$2,254). At the top, the T20 represents households with incomes exceeding RM15,000 (S$4,830) per month. These classifications are widely used in policymaking to determine subsidy eligibility, social assistance, and economic planning. 

On social media, users are debating whether Malaysia’s top taxpayers, the T20 group, should continue receiving subsidies. Supporters argue that since the T20 contributes an estimated 86% of the nation’s tax revenue, excluding them from benefits would be unfair. 

Malaysia’s higher taxpayers, particularly the T20 group, according to a netizen, should be entitled to petrol subsidies since they contribute significantly to national revenue. He added that if the government’s priority is to help the poor, reinstating the GST would be a more effective measure.

Some Malaysians argue it is unfair for the country’s highest taxpayers to be excluded from petrol subsidies. An X user noted that while everyone else enjoys equal subsidies, certain individuals contribute at least 25% of their income in taxes. Now, they face being cut off from benefits, raising questions about fairness.

The definition of Malaysia’s upper‑income category remains complex. A commenter said that high taxpayers in single‑income households with children face heavy burdens. After taxes, unsubsidised petrol adds further strain on their household. 

However, some feel that the high taxpayers should not receive the subsidy. One pointed high earners in Malaysia are constantly showing that they’re driving out of state just to have an expensive lunch. He adds that there won’t be a difference in their budget if they were to pay more for petrol. 

Many Malaysians believe petrol subsidies should apply to all citizens, regardless of wealth. They argue the nation’s resources belong collectively to the people, and excluding the T20 group undermines fairness, as they too are Malaysians.