The government is open to reviewing and improving Malaysia’s tax system, including the possibility of incorporating elements of the Goods and Services Tax (GST) into the existing Sales and Service Tax (SST) framework to create a more progressive system that benefits the people.
However, Prime Minister Datuk Seri Anwar Ibrahim stressed that the SST would remain the foundation of the current tax system, although the government was prepared to make adjustments if necessary.
“Regarding GST and SST, as I have said, we are open to reviewing and improving the tax system.
“But when we talk about GST alone, my concern, which I have repeatedly expressed, is that it would mean taxing the people. Even if it is said that this is not the intention, people who have never paid tax would then have to pay tax,” he said.
Anwar said the government must take into account the current cost of living and the financial pressures faced by Malaysians when considering any changes to the tax structure.
“That is why we are using SST as the foundation. However, if there are certain adjustments that need to be made, we can consider them,” he said.
Anwar was speaking to reporters after attending the 2027 Budget Engagement Session at the Ministry of Finance today.
He said the government was not ruling out adopting certain features of GST that could improve the country’s tax system.
“I have said that the foundation remains SST, but if there are certain features that we can accept, then we will accept them.
“But there is one thing I will not compromise on. I do not want a broad-based tax imposed on the people, as is the case with the basic concept of GST.
“GST is a broad-based tax where everyone is taxed, and I do not agree with that,” he said.
Earlier, in his closing remarks at the 2027 Budget engagement session, Anwar had raised the possibility of incorporating elements from both GST and SST as part of efforts to develop a more progressive and efficient taxation system.
