KUALA LUMPUR, Aug 20 — Prime Minister Datuk Seri Anwar Ibrahim has ruled out the Goods and Services Tax (GST) as Malaysia’s primary tax pillar, maintaining that a broad-based consumption tax would disproportionately burden the nation’s low-income groups.
Speaking to local media following the launch of the TikTok Shop Summit 2026 today, Anwar emphasised that any tax reform must align with the government’s commitment to social equity.
“Whether we need to make some adjustments in the process of improvise the implementation of Sales and Services Tax (SST) or some components of GST, which we can do.
“But the core principle of this government is not to increase taxes for the very poor, therefore GST as a principle cannot be considered,” Anwar stated.
The prime minister’s comments come amid ongoing technical evaluations regarding a potential "hybrid" taxation system.
Anwar previously directed the Ministry of Finance to study a framework that merges elements of the current SST with the GST to create a more efficient yet compassionate revenue stream.
Finance Minister II Datuk Seri Amir Hamzah Azizan is currently spearheading the feasibility study of this hybrid model.
The debate over Malaysia’s consumption tax has remained a contentious political issue for over a decade.
The GST was first introduced at a 6 per cent rate in April 2015 under the administration of Datuk Seri Najib Razak. However, following the 2018 general election, the Pakatan Harapan federal government abolished the levy, reverting to the SST model in September of that year.
The idea of reintroducing the GST is being floated again to broaden the country’s tax base in order to boost revenue and cover fiscal gaps.
