The government has no immediate plans to reintroduce the Goods and Services Tax (GST), the Dewan Rakyat was informed on Friday (Jan 23).
In a written reply, the Finance Ministry acknowledged the potential benefits of the GST but explained that the Sales and Services Tax (SST), which is currently in place, provides a faster and more direct financial impact for the government.
“As highlighted previously by the Prime Minister, the government does not intend to implement the GST at this time. This decision takes into account various factors that require careful consideration, including the disposable income of Malaysians and the overall cost of living,” the ministry said.
The ministry emphasised that the SST will be retained and further enhanced. Noting its long-standing role in the country, the ministry highlighted that the SST has been used in Malaysia for more than four decades and remains an effective taxation mechanism.
Additionally, the ministry pointed out that reintroducing the GST would involve a significant preparation period of up to two years. This would allow businesses sufficient time to upgrade and adapt their systems to comply with the new tax requirements.
The response was made in reply to a question from Datuk Ku Abd Rahman Ku Ismail (PN-Kubang Pasu), who inquired whether the government intended to reintroduce the GST, noting that many financial experts consider it a more comprehensive and efficient taxation system compared to the SST.
The ministry’s statement underscores the government’s cautious approach toward any major tax reforms, balancing revenue considerations with the economic impact on households and businesses. While the GST remains a potential option in the future, the SST continues to serve as the primary indirect tax mechanism for Malaysia at present.
