Bagan MP Lim Guan Eng has urged the government to freeze or defer the 14.2% electricity tariff hike for businesses and the additional RM10 billion tax burden arising from the expanded scope of the Sales and Service Tax (SST), which came into effect on 1 July 2025.
He said such a move is crucial to help Malaysians cope with the 25% reciprocal tariff imposed by the United States, set to take effect on 1 August 2025.
Lim welcomed Bank Negara Malaysia’s (BNM) move to cut the Overnight Policy Rate (OPR) by 25 basis points from 3.00% to 2.75%, describing it as “a much-needed and welcome move” for businesses and households struggling under high prices and increased tax burdens.
However, he stressed that this should be followed by concrete action such as freezing utility and tax increases, so that the positive effects of the interest rate cut can truly reach the people.
“Even though our economic fundamentals have strengthened — with inflation falling to 1.2% as of May 2025, the lowest in 51 months, and labour participation hitting a record 70.8% — the reality is that many businesses and households continue to complain about rising prices, high cost of living, and incomes that are insufficient to cover daily expenses, let alone loan repayments,” he said.
He noted that BNM’s own outlook pointed to persistent downside risks to economic growth, mainly due to slowing global trade, weak market sentiment, and lower-than-expected commodity output.
“BNM’s so-called ‘external uncertainties’ clearly refer to the upcoming implementation of the 25% reciprocal tariff by the US effective 1 August 2025,” Lim said, adding that cutting interest rates in advance as a pre-emptive measure is both wise and necessary to preserve Malaysia’s current economic growth path and maintain moderate inflation.
However, Lim added that the economy could be further strengthened, businesses could thrive, and the lives of the people could improve if the government also acts to freeze or defer utility hikes and SST expansion.
“In such an unfavourable ‘tariff war’ environment, few countries would choose to raise public utility charges or impose additional tax burdens,” he said.
Lim expressed hope that the matter would be seriously considered when the government meets with ruling coalition Members of Parliament next week, and called for the suspension of all tariff and tax hikes until the situation surrounding the tariff war becomes clearer.
