KUALA LUMPUR, Dec 9 — The government will retain the existing Sales and Services Tax (SST) structure while pursuing improvements to ensure a more efficient and effective tax regime, Deputy Finance Minister Lim Hui Ying said.
She said the move reflects the government’s approach to maintaining a targeted consumption tax, under which essential goods and services commonly used by most Malaysians are generally not taxed.
“SST is a more targeted tax system and has been used in Malaysia for more than 40 years. It is familiar to industry, businesses and the public.
“Its implementation also provides faster fiscal gains for the government,” she said during question time in the Dewan Negara today.
She was responding to a supplementary question from Senator Datuk C. Sivaraj on whether the government is considering reinstating the Goods and Services Tax (GST) or further enhancing SST to ensure the tax system remains resilient.
Lim said the government has no immediate plans to reintroduce GST as household incomes remain generally low, making the broader-based tax more burdensome for most people.
“The government acknowledges the strengths of GST. However, as the Prime Minister Datuk Seri Anwar Ibrahim has explained, the government does not intend to implement GST at this stage.
“Reintroducing GST would require a longer preparation period, possibly up to two years, to allow companies to update their systems before it can be rolled out,” she said.
Lim said the government had weighed multiple considerations before deciding on the most appropriate tax approach to strengthen Malaysia’s fiscal position.
“The government assessed the overall structure of the current tax system, potential areas for improvement, prevailing economic conditions, fiscal needs and the overall standard of living,” she added. — Bernama
