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THE government has decided to retain the current Sales and Service Tax (SST) structure; while introducing measures to enhance efficiency and effectiveness, Deputy Finance Minister Lim Hui Ying announced in the Dewan Negara on Tuesday.
Lim emphasised that the move reflects the government’s strategy of targeted consumption taxation, with essential goods and services commonly used by the public generally exempted from SST.
“SST is a more targeted taxation system and has been in use in Malaysia for over 40 years. It is a system well understood by industry, traders, and the general public. Implementation of SST also allows the government to achieve faster fiscal impact,” she said during a question-and-answer session.
Her remarks were made in response to supplementary questions from Senator Datuk C Sivaraj regarding the government’s approach in evaluating the potential reintroduction of the Goods and Services Tax (GST) or improvements to the SST system as a more suitable long-term measure to ensure a resilient national tax framework.
Lim clarified that there are currently no plans to reintroduce GST, citing the generally low-income levels among Malaysians, which would make
“The government recognises the merits of the GST system. However, as explained previously by Prime Minister Datuk Seri Anwar Ibrahim, the government has no immediate plans to implement GST. Reintroducing GST would require a longer preparatory period — potentially up to two years — to allow companies to update their systems before GST could be operationalised,” she said.
She added that the government carefully considers multiple factors when deciding on the most appropriate taxation method to strengthen national fiscal position.
“The government takes into account the overall structure of the current tax system, the potential improvements that can be made, the present economic conditions, the government’s revenue requirements, and the overall living standards of the people,” Lim said.
The statement signals the administration’s commitment to maintaining a balanced, targeted tax regime while exploring opportunities to refine the SST system for enhanced fiscal efficiency, without immediately imposing a broader GST framework. - December 9, 2025
