Budget 2025 Overview - EV Incentive, RON95 Subsidy, & More

Prime Minister Datuk Seri Anwar Ibrahim has announced that RM421 billion will be allocated overall for Budget 2025. This is the last budget under the 12th Malaysia Plan (2021–2025) before switching to the 13th Malaysia Plan, and it is the third budget presented under the Anwar Madani government.
The most anticipated announcement, the rationalization of RON95 gasoline subsidies, is slated to start in mid-2025, as per the Belanjawan. This comes after diesel fuel subsidies were reduced earlier this year as a part of the 2024 national budget plans.
Top-earning Malaysians can expect to pay more for RON95 petrol in the middle of next year, which will save the government some RM8 billion in subsidies.

According to PM Anwar, the government currently spends RM20 billion annually on RON95 gasoline blanket subsidies, which disproportionately help Malaysia's wealthiest 15% of earners as well as foreigners.

Anwar further stated that the remaining 85% of the population will continue to receive fuel subsidies from the government. This implies that in order to meet the needs of the 85%, the government will keep spending RM12 billion on gasoline subsidies.

He did not, however, provide information about how these targeted gasoline subsidies will be applied at the pump. Regarding EVs, the current tax incentive has been reorganised to better reflect the goal of switching to locally made EVs. In response to public demand, Perodua intends to manufacture locally assembled electric vehicles (EVs) for less than RM100,000.

Under the RM10 million Electric Motorcycle Use Promotion Scheme, Malaysians who make RM120,000 or less per year are eligible for rebates of up to RM2,400 for the purchase of locally assembled electric motorcycles. This initiative aims to promote the use of electric motorcycles. In addition to the impending carbon tax on the iron and steel sector, Putrajaya will become a low-carbon city by 2025, with 5km of solar panels installed for energy efficiency on covered pedestrian walkways and in parking lots. Additionally, the Prime Minister announced that the proceeds from the sale of special series number plates will fund the MyLesen B2 license program, which is expected to assist 15,000 young people who are currently enrolled in the MyLesen program.

Furthermore, the earnings will also be used to provide 67,000 helmets to motorcycle riders. The government's plan to expand the urban communities' transit system, which includes feeder buses and railroads, is also included in the budget. The expansion intends to lessen traffic, increase accessibility within cities, and offer more effective and dependable public transportation. In addition, PM Anwar declared that the Klang Valley's My50 Pass subsidy would remain in place for users of public transportation. This move is anticipated to assist more than 180,000 commuters in the area. He continued by saying that the Stage Bus Service Transformation (SBST) program has received over RM270 million in funding, which will improve public transportation options in all of the state's major cities. Ten million ringgit is allocated in the budget to build 47 kilometres of dedicated bus lanes on Jalan Ipoh, Jalan Cheras, and Jalan Gombak.

In the meantime, priority will be given to interstate mobility projects like the Pan Borneo Highway, Central Spine Road, and East Coast Rail Link (ECRL) in order to stimulate economic activity.
Budget 2025 places a high priority on Sabah and Sarawak's infrastructure needs, including clean water, electricity, and roads, with RM6.7 billion and RM5.9 billion, respectively, set aside for development.

With a contract value of RM9.7 billion, Anwar stated that a total of 17 work packages covering the routes from Kota Belud to Kudat, Tawau to Kampung Lot M, and Telupid to Ranau had been issued for the Pan Borneo Sabah Phase 1B. The Pan Borneo Sarawak was anticipated to be finished by November 2024.

Despite the previous announcement by Transport Minister Anthony Loke that users do not currently require a MyDigital ID to use the MyJPJ app, government agencies including JPJ, LHDN, and the PADU centralised database will make full use of the MyDigital ID application, according to the Budget 2025.