Malaysia to keep SST while borrowing select GST features, says finance minister
Finance Minister Liew confirmed the Sales and Services Tax will remain and the government will adopt useful GST elements to avoid tax cascading.
During a parliamentary session, Finance Minister Liew explained that the Sales and Services Tax, which has been used for more than 50 years, will continue because it is easier for businesses and consumers to understand. He said the government intends to incorporate certain GST provisions, such as safeguards against cascading and double taxation, to improve efficiency. Liew pointed out that a GST regime would involve roughly 480,000 firms as tax-collecting agents, compared with about 80,000 under the SST, stressing the need to avoid disrupting the majority.
He also noted that the GST allowed businesses to pass the tax directly to consumers, whereas one outlet aim is to protect both consumers and businesses. The remarks responded to opposition MP Hamzah Zainudin's question on whether a hybrid system might be introduced. Prime Minister Anwar Ibrahim previously indicated openness to studying such proposals, while the finance ministry maintains that reinstating GST depends on median wages exceeding RM4,000.
Why it matters
The decision shapes Malaysia's tax landscape, affecting businesses and consumers nationwide.
How the sides frame it
HIGH AGREEMENTBoth camps report the same proposal to keep the SST and add select GST features, but centrist coverage emphasizes the continuity and consumer-business protection aspects, while right-leaning coverage highlights the move to curb double taxation and tax leakage.
CENTER
Centrist coverage frames the plan as preserving the long-standing SST for its simplicity and protecting businesses and consumers by selectively adding GST safeguards.
RIGHT
Right-leaning coverage frames the plan as a strategic blend of GST features to prevent cascading, double taxation and tax leakage while maintaining a simple tax system.
The right emphasises
- prevent cascading and double taxation
- close tax leakage without expanding taxable entities
- balance that protects buyers while allowing efficient business operation
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