The government will retain the Sales and Service Tax (SST) while incorporating selected positive elements of the Goods and Services Tax (GST) to strengthen the country’s taxation system, Deputy Finance Minister Liew Chin Tong said.
He said Prime Minister Datuk Seri Anwar Ibrahim had indicated the government’s willingness to adopt beneficial aspects of GST during a Budget 2027 engagement session on Aug 18.
Liew said the elements being considered would also aim to prevent consumers from facing the effects of double taxation.
“The government will absorb elements considered good from the GST system into the existing system.
“The existing system is SST, but there will be certain GST elements to ensure there is no cascading or double taxation effect,” he said in the Dewan Rakyat on Wednesday.
He was responding to a supplementary question from Datuk Seri Hamzah Zainudin (PN-Larut) on the direction of the country’s taxation system.
Liew said one of the reasons the government intended to retain SST was because it was easier to understand and had been implemented in Malaysia for more than 50 years.
However, he said the government was looking at adopting certain positive GST elements based on how the system had been implemented in other countries.
“If GST were implemented now, at least 480,000 businesses would be required to pay tax to the government, compared with around 80,000 businesses under SST.
“Certainly, SST can reduce the burden on most small businesses, which would otherwise have to deal with GST as well as refunds and other related issues,” he said.
