Less Red Tape and Bureaucracy on the Horizon?
26 January 2026
The Government Service Efficiency Commitment Act 2025 (“
the Act”) came into operation on 1 December 2025.
This article provides a summary of the salient features of the Act.
Objective
The Act primarily seeks to “
enhance the quality, efficiency and effectiveness of the Government service by addressing bureaucracy, reducing regulatory burden1 and implementing service performance ratings”.
Application
The Act applies to the Government and Government entities.
For the purposes of the Act:
“Government” refers to the Government of Malaysia2; and
“Government entity” refers to: |
- any ministry, department, office, authority or agency, of the Government, or any other entity in the Government service;
- any statutory body of the Government established under an Act of Parliament; or
- the local authorities of the Federal Territories of Kuala Lumpur, Labuan and Putrajaya.3
The Act is to be read together with relevant written laws and its provisions are in addition to, and not in derogation of, the provisions of such laws.
Principles of Commitment
The cornerstone of the Act lies in section 5 which mandates Government service delivery to be based on the following Principles of Commitment:
- service efficiency, namely the delivery of services that are efficient, effective and easily accessible;
- responsibility in governance, namely the practice of ethical and high-performance work culture at all levels of Government entities by instilling accountability, integrity and transparency in the delivery of services;
- structural reform, namely the implementation of continuous changes and improvement in Government entities and regulatory instruments4 to reduce bureaucracy and to adapt to technological advancement and current changes; and
- responsibility in regulatory effectiveness, namely the responsibility in reducing regulatory burden guided by the values of efficiency, effectiveness and necessity.
Putting words into action
Section 6(1) of the Act requires a Government entity to undertake the following at every three-year interval:
- review the procedures under its regulatory instruments; and
- reduce the regulatory burden by at least 25 percent.
A Government entity is required to perform the obligations under paragraphs (a) and (b) of section 6(1) to ensure that its regulatory instruments are efficient, effective and necessary.
Interestingly, section 6(3) restricts any new regulatory instrument from coming into operation unless at least one regulatory instrument on the same subject matter, as determined in the manner as specified in the guidelines issued by the Chief Secretary to the Government (“
Chief Secretary”), is revoked.
It is to be noted that section 6(4) permits the Prime Minister or any Minister designated by him (“
Minister”), after consultation with the Chief Secretary to amend the interval under section 6(1) or the percentage of reduction of regulatory burden under section 6(1)(b).
Service performance rating
In order to measure, assess and monitor the efficiency and effectiveness of Government service delivery, the Chief Secretary is required under section 7(1) of the Act to establish a rating method which is consistent with the Principles of Commitment. The rating methods are to be in accordance with section 7(2) of the Act.
Duties of head of Government entity
The duties imposed on the head of Government entity
5 include the following:
- ensure that the management and services of the Government entity under his supervision are aligned with the purposes of the Act and Principles of Commitment;
- ensure that the governance at all levels of the Government entity under his supervision is implemented with dedication, integrity, accountability and transparency;
- provide a framework for structural reform to reduce the regulatory burden;
- monitor the implementation of policies and directives in relation to the Principles of Commitment at all levels of the Government entity under his supervision; and
- coordinate and monitor the service performance of the Government entity under his supervision towards achieving the rating targets.
Service performance report and rating of Government entity
The head of Government entity shall, from time to time as determined by the Chief Secretary, submit a service performance report to the Chief Secretary, who shall cause the report to be examined, assessed and considered for rating in accordance with the rating method established under section 7 of the Act. After reviewing and considering the findings, the Chief Secretary shall assign a rating to the Government entity.
The Minister may cause the service performance report of any Government entity to be laid before the Dewan Rakyat (House of Representatives) of the Malaysian Parliament.
Carrot and stick
Section 10(5) of the Act provides that any Government entity that achieves a rating as determined by the Chief Secretary may be considered to receive incentives and recognition from the Government whilst section 10(6)(a) provides that the Minister may use the service performance report of a Government entity as a criteria for determining the granting of Government financial allocation to that Government entity.
Application to State Government entities
Any State Government entity may voluntarily submit a service performance report to the Chief Secretary for rating in accordance with section 7 of the Act. The Minister may use the service performance report of a State Government entity as a criteria for determining the granting of Government financial allocation to the State Government entity.
For the above purposes, section 11(6) of the Act defines a “State Government entity” as:
- any ministry, department, office, authority or agency, of a State Government, or any other entity in the State Government service;
- any statutory body of a State Government established under State law; or
- any local authority in a State.
Nowhere to hide … almost
Section 12 requires the Chief Secretary to prepare the Government Service Efficiency Commitment Report every three years, which shall contain, among others, the following information:
- overall effectiveness of Government service delivery;
- regulatory burden reduction performance;
- details of Government entity ratings; and
- details of incentives given to the Government entities that achieve rating targets.
The Minister shall cause the Government Service Efficiency Commitment Report to be laid before
the Dewan Rakyat as soon as may be practicable.
The Minister may, after consulting the Chief Secretary, by order exempt:
- any Government entity or part of any Government entity; or
- any regulatory instrument or part of any regulatory instrument,
from all or any provisions of the Act, subject to such conditions as the Minister may specify. The Minister may also revoke any exemption order made if he is satisfied that such exemption should no longer be granted. All orders including revocation orders shall be gazetted.
Comments
This move by the Malaysian Government to introduce a legal framework to reduce red tape and bureaucracy in Government service delivery is a bold and commendable initiative. To this end, the Act provides benchmarks and identifies the Chief Secretary and the heads of Government entities as the primary drivers to achieve the objectives of the Act. Further, the granting of rewards and incentives for achieving set goals and the potential embarrassment of being identified in the Government Service Efficiency Commitment Report to be tabled in the
Dewan Rakyat may spur Government entities to make serious efforts to improve their service delivery levels. It is hoped that a combination of these factors will lead to a reduction in bureaucracy and red tape in the delivery of Government service in the foreseeable future and beyond.
Article by Tham Zhi Jun (Senior Associate) and Chong Cai Yi (Associate) of the Corporate Practice of Skrine.
1 Section 4 of the Act defines “
regulatory burden” as “
any regulatory or administrative requirements imposed by a regulatory instrument on individuals or businesses which are excessive, irrelevant or inefficient, or have detrimental effects”.
2 Section 3 of the Interpretation Acts 1948 and 1967.
4 The expression “regulatory instrument” has been widely defined in section 4 of the Act as “(a) any subsidiary legislation made under the Federal Constitution or any Act of Parliament; or (b) any directive, circular, guidelines, procedure, work process or any other form of administrative instrument issued by a Government entity”.
5 Section 4 of the Act defines “
head of Government entity” as
“any officer who is responsible for a Government entity, including any officer authorised in writing by the head of Government entity to act on his behalf.”
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