Subsidy Reforms Should Be Gradual – ACCCIM
KUALA LUMPUR: Subsidy reforms should be carried out gradually to avoid major shocks to consumers and businesses, said the President of the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), Tan Sri Low Kian Chuan.
He stated that such reforms need to be carefully planned and transparently implemented to minimize errors of “inclusion and exclusion” and improve enforcement for greater effectiveness.
“A small price increase is more easily accepted and allows people and businesses to adapt to new pricing situations over time,” he said in a statement today.
He noted that over time, the rationalization of fuel and energy subsidies will compel small and medium enterprises (SMEs) to seek alternative and cleaner energy sources to optimize operating costs and maintain their competitiveness.
“The government can provide tax incentives to SMEs to adopt renewable energy sources and energy-efficient technologies to help reduce reliance on fossil fuels and mitigate the impact of fuel price volatility,” he said.
Accordingly, ACCCIM believes that diesel subsidy rationalization is a step in the right direction to ensure fiscal and debt sustainability and promote environmentally sustainable practices.
The chamber said that targeted diesel subsidy rationalization not only helps reduce the fiscal deficit but also benefits the economy, as the savings from subsidies (estimated at RM4 billion) can be reallocated to productive sectors such as healthcare, education, public transportation, and elder care community services.
“We welcome the continued subsidies for public transport and goods vehicles to help minimize the impact on inflation and business costs. Additionally, the monthly cash assistance of RM200 for eligible individuals will help alleviate the impact of rising household costs,” he said.
