The government will maintain the current Sales and Services Tax (SST) system while seeking improvements to make it more efficient, Deputy Finance Minister Lim Hui Ying said in the Dewan Negara today.
Lim explained that SST is a targeted consumption tax, under which essential goods and services widely used by Malaysians are generally exempt from taxation. “SST has been used in Malaysia for over 40 years and is familiar to industry, businesses, and the public. Its implementation also provides faster fiscal gains for the government,” she said.
Responding to questions on whether the Goods and Services Tax (GST) might return, Lim said there are no immediate plans to reinstate it, as household incomes remain relatively low and a broader-based tax would be more burdensome.
“The government acknowledges the benefits of GST, but as Prime Minister Datuk Seri Anwar Ibrahim has explained, reintroducing it is not intended at this stage. Rolling it out would also require up to two years of preparation for companies to update their systems,” she added.
Lim said the government considered multiple factors, including the structure of the current tax system, potential areas for improvement, prevailing economic conditions, fiscal needs, and the standard of living, before deciding to retain the SST.
