MCA urges Putrajaya to raise electricity relief to 1,200kWh, cut SST and review base tariff

 

MCA has urged the government to extend household electricity relief to 1,200kWh through a progressive mechanism, while also reviewing the Sales and Service Tax (SST) on electricity and the current base tariff.

The call comes after the government announced that household electricity relief would be expanded from 600kWh to 800kWh, a move aimed at easing the burden on consumers under the revised electricity tariff structure.

MCA Economic and SMEs Affairs Committee chairman Datuk Ir Lawrence Low welcomed the increase but said households that marginally exceed the new threshold could still face a sudden jump in their electricity bills.

“Relief should taper progressively as consumption rises, rather than disappear abruptly once a threshold is crossed,” he said.

According to Low, who is also the party’s vice president, extending relief to 1,200kWh through a gradual reduction mechanism would allow households to maintain normal electricity use while continuing to improve energy efficiency.

He argued that affordable electricity should be viewed as part of the wider economic cycle rather than simply as a consumption issue.

“Keeping electricity costs manageable does not mean encouraging waste. It gives households greater disposable income to invest in energy-efficient air conditioners, refrigerators, washing machines, computers, electric vehicles and other efficient technologies,” he said.

Low added that such spending would also support Malaysia’s electrical and electronics, retail, repair and related service sectors.

He said Malaysia’s energy policy should evolve alongside the country’s push towards artificial intelligence, the digital economy and smart homes.

“Efficient electricity use, energy-saving technology and smart devices should be encouraged, rather than simply pushing households to consume less electricity,” he said.

Beyond electricity relief, Low called on the government to review the 8% SST imposed on household electricity and consider reducing it to 6% or lower.

“If the government can lessen other taxes affecting essential services and economic activity, basic household electricity deserves similar consideration,” he said.

Low also urged Putrajaya to review the current Regulatory Period 4 (RP4) base tariff of 45.40 sen per kWh and consider moving it closer to the previous RP3 rate of 39.95 sen per kWh, a difference of 5.45 sen or about 13.6%.

He said that while the Automatic Fuel Adjustment (AFA) mechanism already reflected changes in fuel and generation costs, the base tariff, capacity charges and network charges should also be reviewed transparently.

“Where efficiency gains and cost savings have been achieved, consumers and businesses deserve to share those benefits,” he said. ‒  Focus Malaysia