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SHAH ALAM – Prime Minister Datuk Seri Anwar Ibrahim is leaving the door open to selected elements of the goods and services tax (GST) being incorporated into the country’s existing sales and service tax (SST), while ruling out a broad-based tax burden on Malaysians for now.
Rather than reinstating GST outright, Anwar said the government could study features from both systems and consider adjustments that would make taxation more progressive without worsening the pressure faced by households.
Anwar, who is also Finance Minister, said the government’s priority was to improve the existing tax structure while taking into account the impact of any changes on people already dealing with higher living costs.
“We are open to studies to improve our tax system. But if we talk about the GST, my concern, which I have repeatedly raised, is imposing more taxes on the people.
“While some say the GST is more efficient, it does mean that certain people who haven’t been paying taxes would have to do so. Given the rise in cost of living, that would burden the people.
“That’s why we can use the SST as a baseline; if there are several adjustments that need to be made, we can make them,” he told reporters after an engagement session for Budget 2027 at the Finance Ministry’s headquarters on Tuesday.
He said the government was prepared to consider selected GST characteristics if they could strengthen the taxation system, but stressed that this would not mean imposing a wider tax on the population.
“I have said earlier, the basis remains SST. But if there are several features that we can accept, we accept them.
“But I will not compromise on one thing. I do not want a tax imposed on the people across the board, as is the fundamental approach under GST,” he said.
The remarks came amid renewed discussion over Malaysia’s taxation framework, with the government continuing consultations for Budget 2027.
GST was introduced in April 2015 at a rate of six per cent before being zero-rated in June 2018, and was subsequently replaced by SST in September that year.
While GST has been touted as a more comprehensive consumption tax, its potential impact on household expenses has remained a key concern, particularly as Malaysians continue to face cost-of-living pressures.
The government has previously indicated that GST would only be reconsidered when Malaysia’s median monthly wage exceeds RM4,000, while the current median monthly wage is about RM2,800.
Meanwhile, Anwar said the government had identified measures aimed at easing the financial burden on the M40 group as part of preparations for Budget 2027.
“We have a list of matters that we have given priority to in order to ease the burden on the M40,” he said.
The latest position suggests that any future changes to Malaysia’s tax system are likely to focus on improving the existing framework rather than an immediate return to the previous GST model.
