Will GST on electricity bills be reviewed by the government?

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Government Review of GST on Electricity Bills is Advocated

The government should review the implementation of Goods and Services Tax (GST) on electricity bills. This call stems from the ongoing inclusion of the cost component from Power Purchase Agreements (PPAs) for First and Second Generation Independent Power Producers (IPPs) within the current electricity tariff structure. The Energy Commission (ST) has indicated it will not pursue renegotiations for second-generation PPAs, while past attempts to renegotiate first-generation PPAs, initiated in 2007, were largely unsuccessful in mitigating their impact on electricity tariffs.
Status of Power Purchase Agreements

First-generation PPAs are scheduled to conclude by 2016, with the exception of those that received extensions. Subsequent second-generation PPAs have expiration dates ranging from 2020 to 2024. Despite these timelines, the ST has stated it will not undertake renegotiations for the second-generation agreements. Previous efforts to renegotiate first-generation PPAs, starting in 2007, failed to significantly reduce the financial burden they impose on electricity tariffs.
Need for Transparent Tariff Setting

There is a clear imperative for the ST to establish a transparent tariff-setting mechanism that actively involves all relevant stakeholders. This approach is crucial for ensuring fairness and accountability in electricity pricing. The Association of Water and Energy Research Malaysia (AWER) has been actively engaging with the ST and the Ministry of Energy, Green Technology and Water (KeTTHA) since 2011, offering numerous suggestions aimed at improving both the tariff-setting process and the broader national electricity industry.
AWER's Engagement and Recommendations

AWER has consistently provided feedback and recommendations to governmental bodies regarding the electricity sector. Since 2011, the association has submitted multiple suggestions to the ST and KeTTHA concerning enhancements to tariff setting and overall improvements to the national electricity industry. These proactive engagements highlight AWER's commitment to fostering a more efficient and equitable energy landscape in Malaysia.

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Will GST on electricity bills be reviewed by the government?

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