For many, the year 2020 is significant. It was Prime Minister Tun Dr Mahathir Mohamad’s original goal for Malaysia to achieve developed nation status. For those too young to remember this happening, it will also be the start of a new decade – unless you’re being pedantic.
While some things may not have happened, here are some things that will definitely take place when January 2020 rolls around.
Targeted fuel subsidy
The price of RON 95 petrol was set to be set on a free market-driven float from January 2020, with subsidies being targeted at select individuals. However, Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail announced that it would instead be implemented at a later date.
Despite this, you won’t see the price of petrol suddenly skyrocket when the clock ticks past midnight. The government has promised that it will instead increase prices by 1 sen each week until petrol prices reach parity with their market value. Incidentally, the subsidies will not be provided in the event that the price of RON 95 falls below RM2.00 per litre.
Gradual implementation of the floating petrol price also gives the government time to get the subsidy programme running. Come January, only those receiving aid through the Bantuan Sara Hidup (BSH) programme qualify for fuel subsidies. Those in the M40 will instead have to wait until March 2020 for their turn.
This subsidy and floating petrol price will not apply to Sabah and Sarawak.
Digital Tax
Digital services provided by foreign companies are set to get a little more expensive with the introduction of a 6% digital tax. This puts them on equal footing with local businesses that have already been subject to the 6% Sales and Service Tax.
For consumers, this translates into common services like Netflix, Spotify, Airbnb and Steam being taxed. Netflix in particular has taken this opportunity to also raise prices across all subscription plans.
Local businesses will not be spared the impact of the digital tax as buying online ads with services like Google and Facebook will also be subject to the tax.
Reduced tolls
It’s not all gloom and doom next year. There will be an 18% reduction (on average) in PLUS toll rates across the country. Similarly, the toll for using the Second Penang Bridge will be reduced to RM7.
Congestion charges
Four highways – Lebuhraya Damansara Puchong (LDP), Sistem Penyuraian Trafik KL Barat (SPRINT), Lebuhraya Shah Alam (Kesas) and SMART Tunnel (SMART) – will have congestion charges implemented.
These highways will be acquired by the federal government and see their tolls removed in January 2020 (although it may be delayed). However, this will be replaced by a congestion charge to control the amount of traffic and encourage the use of public transportation.
The value of the charge will be 30% lower than current toll rates during normal and peak hours. No charge will be in place during off-peak hours.
Mandatory child seats in cars
All infants and young children below the height of 135cm must travel in a car child restraint system (CRS) from January 2020. The Malaysian Institute of Road Safety Research (MIROS) has released a free online guide to help parents determine which seats meet the minimum necessary safety standards.
Minimum wage increase
The mandatory minimum wage in the Klang Valley is set to increase to RM1,200 for salaried employees. This is the second increase in minimum wage as the Pakatan Harapan government works towards its goal of a RM1,500 minimum wage in urban areas.
e-Wallet credits
Every Malaysian over the age of 18, with an annual income of less than RM100,000, will receive RM30 worth of e-Wallet credit in 2020. This credit can be claimed from January 15 onward and must be used before the end of March 2020.
This distribution of credit is meant to promote the use of e-wallets among Malaysians. However, only three e-wallets have been selected to receive the credit: Boost, GrabPay, and Touch ‘n Go eWallet. Users will also have to verify their identity through the respective e-wallets.
That’s a lot to take in at the start of the year. New petrol prices, new taxes, lower tolls, free e-wallet credit. It’s quite possible that you’ll lose track at some point.
Whatever it is, do not lose heart. After all, you made it this far and things turned out alright. Just stick to the important fundamentals of managing your life. Spend a little, save a little, treat yourself once in a while.
If you’re having trouble with any of this, we’re here with plenty of articles to help you out. Regardless of whether you’re planning on saving for a big holiday or want to raise your credit score to buy that dream home.
