KUALA LUMPUR, June 2 — A total of 499 businesses have strongly supported the reintroduction of the goods and services tax (GST) to replace the current sales and services tax (SST) 2.0 as GST is seen to provide a more equitable tax structure and eliminate the cascading and compounding of taxes commonly found in the SST regime.

In a statement, the Federation of Malaysian Manufacturers (FMM) said the responses were based on a survey carried out by FMM on the reintroduction of GST in May 2020.

FMM president Tan Sri Soh Thian Lai said prices of Malaysian exports would become more competitive on the global stage as no GST is imposed on exported goods and services, while GST that is incurred on inputs could be recovered along the supply chain.


“Moreover, as this broad tax base system would increase indirect taxes, it will give flexibility to the government to reduce direct taxes (personal income tax and corporate tax) to make Malaysia a more attractive business destination,” he added.

As the government is now focusing on reviving the economy, Soh said manufacturers need to prioritise their time and energy on rebuilding their business.

Hence, the reintroduction of GST should not be considered in isolation but as a part of the holistic assessment of Malaysia’s tax systems and the country’s fiscal position, he added.


“While the introduction of a broad-base consumption tax would strengthen the country’s fiscal position, GST 2.0 must be easy to manage but not increase the cost of doing business,” he said.

As the change and transition to GST 2.0 can be challenging, he said FMM calls for the government to consult all stakeholders for a thorough review process to ensure a successful implementation of an effective tax regime. — Bernama