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 duty, under which essential goods and services commonly used by most Malaysians are untaxed.
“The 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 when answering a supplementary question from Senator Datuk Sivaraj Chandran on whether the government is considering reinstating the Goods and Services Tax (GST) or will enhance the SST to ensure a resilient tax system.
Lim said the government has no immediate plans to reintroduce the GST as household incomes remain generally low, making the broader-based duty more burdensome for most.
“The government acknowledges the strengths of GST. However, as Prime Minister Datuk Seri Anwar Ibrahim has explained, the government does not intend to implement the GST at this stage.
“Reintroducing the 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.
“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” before implementing the current approach, Lim added.
