Latest news with #FederationofMalaysianConsumersAssociations
The Star
4 days ago
- Health
- The Star
Basic health insurance scheme still in the works
PETALING JAYA: The government's proposed basic health insurance scheme, aimed at cushioning Malaysians from rising medical costs, is still in the early stages of development. It is understood that the scheme will be operated by private insurance companies and primarily target the M40 and T20 income groups that rely on private healthcare. Finance Minister II Datuk Seri Amir Hamzah Azizan recently said the government is exploring the possibility of introducing a basic medical insurance plan to ease the public's financial burden in the face of escalating healthcare expenses. Federation of Malaysian Consumers Associations secretary-general Dr Saravanan Thambirajah described the proposal as a progressive step, provided that it is designed to improve access and affordability for all Malaysians. 'To genuinely serve the people, this scheme must not become just another commercial product that enriches private insurers or healthcare providers at the expense of consumers,' he said. Saravanan stressed that the insurance plan must be treated as a public good, designed, managed, and enforced by the government with a strong emphasis on equity, transparency and affordability. He also criticised the current state of private healthcare and insurance in Malaysia, saying both sectors operate with minimal oversight. 'Medical inflation continues to rise sharply because private hospitals are free to set their own fees with little scrutiny. 'Meanwhile, private insurance premiums increase disproportionately with age, often pricing out the elderly and those with pre-existing conditions,' he said. To address this, Saravanan urged the Health Ministry to establish an independent and powerful regulatory body to oversee the private healthcare sector. Such an agency, he said, must have the authority to set service price ceilings, standardise treatment costs, ensure fair billing, and mandate hospitals to publish their fees and provide clear cost estimates upfront. Health economist Prof Dr Maznah Dahlui of Universiti Malaya said if the scheme is designed as a social or national health insurance programme, it could play a crucial role in sustaining the country's healthcare system amid rising disease burdens and costs. 'But if it turns out to be just another form of private health insurance, we risk going down the path of the United States,' she said. Dr Maznah called on the government to come up with a national health fund to ensure universal basic coverage, with the option for those who can afford it to top up with private insurance or out-of-pocket payments. As for the B40 group, she said they can be subsidised by the government, if their medical expenses exceed the scheme's coverage limit. Dr Maznah also expressed concern over the decision to allow Employees Provident Fund savings to be used for private health insurance premiums instead of for social health insurance. She said private insurance should only be paid for out-of-pocket or funded by employers. Prof Dr Sharifa Ezat Wan Puteh, a health economics and public health specialist from Universiti Kebangsaan Malaysia, said the government's idea is well intentioned but needs careful structuring. 'The issue is which bracket will be paying premiums, from which fund, and which income bracket will be subsidised through public fund?' she said. Dr Sharifa stressed that the basic medical insurance should cover essential services, basic procedures, and access to secondary and tertiary care, with some co-payments. She said if premiums are set too low, it could jeopardise the quality of care, with the low-income group affected the most.
New Straits Times
6 days ago
- Business
- New Straits Times
Fruit SST exemption a step in the right direction, but broader reforms needed, say consumer and health groups
KUALA LUMPUR: Consumer and health groups say while the exemption of apples and oranges from the Sales and Service Tax (SST) is a positive move, it falls short of tackling deeper issues of food affordability, nutrition and profiteering. Federation of Malaysian Consumers Associations (Fomca) chief executive officer Datuk Dr Saravanan Thambirajah said the measure was too narrow and lacked a coherent food policy direction. "While the exemption of apples and oranges from SST may offer some short-term relief, Fomca does not view this move as fully adequate or genuinely welcome. In principle, food — being a basic human need — should never have been subjected to SST in the first place," he said. Malaysia Consumers Movement deputy president Beninder Johl said the taxation of fruits in any form was misguided. "We don't support taxing fruits at all. Imported fruits aren't only consumed by the rich — middle-income families buy them, too. We should be taxing unhealthy foods instead, not nutritious ones." He also pointed out that local fruits were not necessarily more affordable. "If we force a shift away from imported fruits, demand for local fruits could rise and push prices up further." He said any expansion of SST must be backed by targeted subsidies, cash aid and support for local agriculture. Consumers Association of Penang president Mohideen Abdul Kadeer said while SST exemptions for basic items were welcome, enforcement must be tightened to prevent price manipulation. "We support the imposition of SST on non-essential items. But any cost increase may be passed on to consumers." He added that Malaysia's food security was under threat due to over-reliance on imports. "We are even importing 'local' varieties — once abundant in our orchards — from Thailand. Fruits like mangoes, guavas and melons are now being brought in from overseas. The government must urgently invest in domestic fruit cultivation." He urged the Domestic Trade and Cost of Living Ministry to ramp up inspections and price transparency to prevent profiteering. Meanwhile, the Malaysian Dietitians' Association supported the exemption as a strategic measure to help low-income families, especially those managing chronic illnesses. "This tax exemption helps these families maintain access to nutritious food without additional financial strain," said its president, Dr Barakatun Nisak Mohd Yusof. She said apples were a commonly preferred fruit among the B40 group due to their shelf life and affordability, particularly for those living with diabetes and high blood pressure. "Currently, 95 per cent of Malaysians do not meet the recommended daily intake of fruits and vegetables, so even small policies like this can make a meaningful difference in public health." Dr Barakatun Nisak added that affordability alone was not enough. "We need to make healthy food not just affordable but also reachable and realistic. Policy and ground-level action must work hand-in-hand to support real behaviour change." Earlier, Prime Minister Datuk Seri Anwar Ibrahim announced that imported apples and oranges would be exempt from SST following a cabinet decision made on June 25.
The Star
6 days ago
- Business
- The Star
Fomca: Financial access at risk
PETALING JAYA: Ahead of the implementation of service tax on financial services on July 1, groups have voiced concerns, saying that this is likely to drive up costs for businesses and the regular people. Federation of Malaysian Consumers Associations (Fomca) vice-president Datuk Indrani Thuraisingham said ordinary Malaysians would be the most impacted by the 8% service tax on fee-based financial services. Indrani said the small charges may seem as a trivial amount but it is a huge sum when multiplied by the millions of transactions. 'When Malaysian banks are riding on massive profits and control trillions in assets, why should struggling consumers be asked to chip in more. 'This is taxing basic financial access, not luxury,' said Indrani. Indrani called on Bank Negara Malaysia and the Finance Ministry to immediately review this new ruling. 'The principle of consumer fairness must be upheld,' said Indrani, adding that banks should absorb part of this tax, especially on low value and high-volume services. Indrani also said consumer groups should be given the space to scrutinise every fee schedule so that banks should be held accountable and thereby prevent opportunistic fee hikes disguised as tax adjustments. CLICK TO ENLARGE 'If this goes ahead unchecked, the government can expect deeper financial exclusion, rising household debt and widening inequality,' she said. Fomca secretary-general Saravanan Thambirajah said the announcement by Putrajaya raises concerns for everyday consumers on how this would affect their financial service experience. 'In real terms, this tax means that consumers will see higher charges for many common services offered by banks. 'Even services used by small businesses and self-employed individuals such as overdraft facilities, bank guarantees and remittance services are likely to be affected,' said Saravanan. Saravanan also said there is a concern that this move would set a precedent for banks to gradually increase fees under the guise of tax compliance. 'Once consumers grow accustomed to higher charges, more subtle fee revisions should be introduced over time,' said Saravanan. SME Association of Malaysia national president Chin Chee Seong said as the 8% service tax rate predominantly affects commission-based financial services, SMEs are likely to see an increase in cost of doing business. Chin said businesses are already bracing for the SST on commercial rental and leasing services, barring which rental costs have already increased by 20%-30% from a year ago. 'On top of that, they will also be dealing with the mandatory 2% Employees Provident Fund contribution for foreign workers and the restructuring of electricity tariff. 'The cost of doing business is getting higher and higher. It will definitely affect our cashflow. It doesn't look good for the industry and the economy,' Chin said. 'If all of these are coming together, how are we going to plan our next few months especially as we have passed the mid-term. It is going to be tougher for us to do business,' Chin added. Chin said there has to be more clarity on certain aspects of the tax system for instance on the RM500,000 threshold on taxable financial services. 'Items such as luxurious items, (imported) fruits, I think that is clear cut and they can go ahead. But when it comes to financial services such as leasing and rental, I think that should be deferred first,' he said. 'The government should understand that we are not against their policies but these policies must be more considerate of the difficulties of doing business. The cost of doing business is high while consumer spending is low,' Chin said.
The Star
20-06-2025
- Business
- The Star
Fomca lauds new 'B40-friendly' electricity tariffs
KUALA LUMPUR: The Federation of Malaysian Consumers Associations (Fomca) has expressed full support for the implementation of the new electricity tariff structure under Regulatory Period 4 (RP4). The new tariffs will take effect from July 1, 2025, to Dec 31, 2027, under the Incentive-Based Regulation (IBR) framework. Describing it as timely, progressive and beneficial for Malaysian households, Fomca chief executive officer Dr T. Saravanan said the new tariffs reflects a fairer and more transparent energy pricing system. "This initiative comes at a crucial time when many households are facing financial pressures due to inflation and the rising cost of living," he said. Saravanan said the revised tariff structure reduces the average base tariff from 45.62 sen/kWh to 45.40 sen/kWh, contributing to an estimated 19% reduction in total average electricity costs compared to the previous regulatory period. Although the rate cut may appear marginal, he said it is supported by structural reforms that provide greater protection to domestic consumers, particularly those in the B40 and M40 income groups. Saravanan said the introduction of the "Energy Efficiency Incentive" allows households that consume 1,000 kWh or less per month to avoid any tariff increase, thereby rewarding energy-efficient users and encouraging responsible consumption. "The updated structure also includes a more detailed billing system, with breakdowns of energy generation, network usage, capacity charges, and retail costs. "This level of transparency empowers consumers to understand their bills better and provides clarity on how costs are derived," he said. The expanded "Time of Use" scheme now includes weekends and off-peak weekday hours from 10pm to 2pm the next day, enabling consumers to enjoy further savings by shifting high-usage activities to these periods. Fomca also welcomed continued protection for vulnerable groups, including a RM40 monthly rebate for hardcore poor households under the e-Kasih programme, and dedicated tariffs for the agriculture, water, sanitation, and rail sectors. A 10% rebate for educational institutions, places of worship, and registered welfare homes will also remain in place. Saravanan said the replacement of the Imbalance Cost Pass-Through mechanism with the new Automatic Fuel Adjustment system would enhance price responsiveness to global fuel and currency movements. He however stressed the need for clear communication on any resulting price changes. He urged the Domestic Trade and Cost of Living Ministry to step up enforcement against unjustified price hikes in essential goods that may be triggered by the tariff adjustment. "Fomca will continue to monitor the implementation closely and advocate for ongoing consumer engagement, education and regulatory enforcement to maximise the impact of this policy reform," he said. The Energy Commission on Friday (June 20) announced that starting July 1, 2025, over 23.6 million domestic users in Peninsular Malaysia will benefit from fairer and more progressive electricity rates under the newly approved tariff schedule for Regulatory Period 4 (2025-2027). This includes changes to the average base tariff rate, the tariff structure and the fuel cost adjustment mechanism, implemented under the Incentive-Based Regulation framework. – Bernama
The Sun
20-06-2025
- Business
- The Sun
FOMCA backs new RP4 electricity tariff, calls it fair and timely
KUALA LUMPUR: The Federation of Malaysian Consumers Associations (FOMCA) has expressed full support for the implementation of the new electricity tariff structure under Regulatory Period 4 (RP4), describing it as timely, progressive and beneficial for Malaysian households. FOMCA chief executive officer Dr T. Saravanan said the new tariff, which will take effect from July 1, 2025, to Dec 31, 2027, under the Incentive-Based Regulation (IBR) framework, reflects a fairer and more transparent energy pricing system. 'This initiative comes at a crucial time when many households are facing financial pressures due to inflation and the rising cost of living,' he told Bernama. He said the revised tariff structure reduces the average base tariff from 45.62 sen/kWh to 45.40 sen/kWh, contributing to an estimated 19 percent reduction in total average electricity costs compared to the previous regulatory period. Although the rate cut may appear marginal, Saravanan said it is supported by structural reforms that provide greater protection to domestic consumers, particularly those in the B40 and M40 income groups. Saravanan said the introduction of the 'Energy Efficiency Incentive' allows households that consume 1,000 kWh or less per month to avoid any tariff increase, thereby rewarding energy-efficient users and encouraging responsible consumption. 'The updated structure also includes a more detailed billing system, with breakdowns of energy generation, network usage, capacity charges, and retail costs. 'This level of transparency empowers consumers to understand their bills better and provides clarity on how costs are derived, thereby enhancing trust and enabling more responsible consumption decisions,' he said. The expanded 'Time of Use' (TOU) scheme now includes weekends and off-peak weekday hours from 10 pm to 2 pm the next day, enabling consumers to enjoy further savings by shifting high-usage activities to these periods. FOMCA also welcomed continued protection for vulnerable groups, including a RM40 monthly rebate for hardcore poor households under the e-Kasih programme, and dedicated tariffs for the agriculture, water, sanitation, and rail sectors. A 10 percent rebate for educational institutions, places of worship, and registered welfare homes will also remain in place. Saravanan said the replacement of the Imbalance Cost Pass-Through (ICPT) mechanism with the new Automatic Fuel Adjustment (AFA) system would enhance price responsiveness to global fuel and currency movements, but stressed the need for clear communication on any resulting price changes. He also urged the Domestic Trade and Cost of Living Ministry (KPDN) to step up enforcement against unjustified price hikes in essential goods that may be triggered by the tariff adjustment. 'FOMCA will continue to monitor the implementation closely and advocate for ongoing consumer engagement, education and regulatory enforcement to maximise the impact of this policy reform,' he said. The Energy Commission today announced that starting July 1, 2025, over 23.6 million domestic users in Peninsular Malaysia will benefit from fairer and more progressive electricity rates under the newly approved tariff schedule for Regulatory Period 4 (2025–2027). This includes changes to the average base tariff rate, the tariff structure and the fuel cost adjustment mechanism, implemented under the Incentive-Based Regulation framework.
