The government has no plans to reinstate the Goods and Services Tax (GST), stating that the current Sales and Services Tax (SST) system better supports targeted taxation.
In a written parliamentary reply, the Finance Ministry explained that most goods and services commonly used by the public are generally exempt from SST. The ministry also noted that the income level of most Malaysians remains too low for a broad-based tax like GST to be viable.
“The implementation of SST provides a faster fiscal impact compared to reintroducing GST, which would require up to two years of preparation for companies to update their systems for GST compliance,” the ministry said.
The response came after Datuk Dr Nik Muhammad Zawawi Salleh (PN-Pasir Puteh) asked whether the government was considering a staged expansion of SST to create a “GST 2.0.” The ministry emphasized that any measures to boost revenue will be implemented carefully, with stakeholder engagement and consideration of fiscal needs, without placing undue burden on the public.
Separately, in response to a question from Jimmy Puah (PH-Tebrau) regarding SST on imported fruits, the ministry said the revised rates are expected to generate an additional RM38 million in revenue. Overall, the expansion of SST is projected to raise an extra RM10 billion annually starting next year.
The ministry also highlighted that public feedback was considered when revising SST rates, with exemptions for selected imported fruits such as apples, oranges, dates, and mandarins. “This decision ensures continued access to nutritious and commonly consumed foods, particularly for vulnerable groups,” it said.
