Malaysia has danced between tax systems more than most of us switch mobile plans. We’ve heard songs, slogans, and speeches remember that catchy “ABCD GST” moment? It was supposed to teach us how GST would “save” the country. Now that we’re back to SST, shouldn’t someone be singing “ABCD SST”? But strangely... silence. Maybe the chorus doesn't sound so patriotic anymore.
Let’s look past the karaoke and break down what we’re really paying for and why the rakyat always ends up footing the bill, no matter what tune is playing.
SST: Silent But Not Harmless
SST is like that quiet cousin who never causes drama, but somehow still borrows your money. It looks simple: a Sales and Services Tax that applies only to selected goods and services. It’s not on your receipt like GST was so people assume it’s better.
But guess what? Businesses don’t just absorb SST. They pass it down quietly, steadily, invisibly through price hikes. You may not see a 6% tax line, but you’ll feel it in your grocery bill. No transparency, no breakdown, no debate. Just inflation dressed in polite shoes.
And just like GST, it doesn’t care if you’re a cleaner or a CEO you pay the same for a bottle of soy sauce.
GST: The Transparent Burden
Now GST that one was honest. Brutally honest. You saw the tax clearly, 6% printed in bold on everything from roti canai to your shampoo. It taxed every stage of the supply chain, but only businesses could claim back what they paid. Not the customer.
The system made sense on paper. In reality, it became a daily slap in the wallet. While people were still struggling with stagnant wages, rising living costs, and affordable housing dreams that now required a miracle, GST became the final straw.
And the ones who felt it the most? The B40. Families who barely made ends meet suddenly had to pay more for basics. “Efficiency” doesn’t feed a child, especially when the system forgets who it’s supposed to serve.
Why Some Prefer GST Over SST
Believe it or not, some folks especially economists, policymakers, and business associations actually want GST back. Why?
- It’s systematic. GST covers the entire supply chain and avoids “tax-on-tax” problems. SST can feel like playing darts in the dark.
- Better revenue for the government. GST generates more income billions more. That money, in theory, funds subsidies, services, and development. In theory.
- Transparency. GST receipts showed exactly how much tax was collected. SST? Hidden behind the price tag.
- Global alignment. Over 160 countries use GST/VAT. It’s modern. SST? Feels like flipping back to a Nokia 3310 in the iPhone era.
Let’s Be Honest GST Isn’t Automatically Smarter or Fairer
Not everyone is sold on the idea that GST is superior to SST. In fact, some of the usual pro-GST arguments don’t hold up.
- Simplicity? GST involves mountains of paperwork, audits, refund claims, and compliance headaches. SST? Far simpler.
- Progressiveness? GST and SST can both exempt essentials. So GST isn’t automatically kinder to the poor.
- Fraud prevention? Yes, GST leaves a paper trail. But SST with e-invoicing can now match that. Tech is the equalizer.
- Fairness? GST taxes everyone equally at checkout but is that fair? SST allows selective taxation. The real debate is which items should be taxed.
So no, GST isn’t magically more just. Implementation, enforcement, and actual benefits to the rakyat matter more than spreadsheets.
The Real Reason BN Fell Over GST
Prices shot up when GST was introduced before GE14. But did they drop when GST was abolished? Nope. Then came SST and prices stayed high, or crept higher.
The flawed rollout of GST is what really hurt the people and the BN government. Consumers were charged 24% at point of sale, when only 6% was supposed to be GST. The other 18%? To be reimbursed to traders by Customs. But most traders never returned the difference.
Had traders absorbed that cost knowing they’d be reimbursed in two months the public would’ve only felt the 6%. That honesty might have saved Najib’s political life. Instead, businesses profited, the people fumed, and BN collapsed.
When You Let Go of Principles, You Let Go of the People
Take the latest move the government’s proposal for a voluntary health insurance scheme using EPF Account 2. Even if it’s optional, it’s still problematic. The EPF was created to protect workers’ retirement, not to patch holes in the public healthcare system.
Calling it “voluntary” doesn’t change the fact that this undermines the core principle of EPF and sets a dangerous precedent. It shifts responsibility for healthcare from the state to individuals and eats away at people’s future financial security.
Let’s be clear: a minister has no business unilaterally “opening the gate” to such a massive policy shift. This kind of decision should go through Parliamentary debate and public scrutiny. Otherwise, what’s next? Using EPF to pay off PTPTN? Buy flood insurance? Fix potholes?
When the government keeps treating the rakyat’s savings like a public ATM, don’t be surprised when the people stop trusting any form of tax, any form of policy even if it’s well designed.
When People Stop Trusting the System, Even Good Policies Fail
Here’s the hard truth tax systems don’t fail because of percentages. They fail because people don’t trust where their money goes.
Most Malaysians don’t fully understand the web of 1MDB. What they remember is this: prices rose, wages didn’t, and Najib went to jail. Not over 1MDB billions, but RM42 million from SRC International, linked to abuse of power and breach of trust.
Some say that if the Attorney General had pursued a civil case to recover the RM42 million from nine recipients, Najib might not be in jail. It shows how legal technicalities influence public memory. But deeper than that: no tax system survives if people believe their contribution funds jets and diamonds, not roads and medicine.
GST is the Superior Option
1. Revenue Generation
In the year prior to its repeal in June 2018, the Goods and Services Tax (GST) generated a peak revenue of RM44 billion.
But that number isn’t the whole truth. It didn’t include the massive refund obligations owed to businesses money that had to be returned later. The incoming PH 1.0 government revealed that a large portion of that RM44 billion was overcollected and unrefunded, leaving a ballooned figure that wasn’t fully usable. Meanwhile, SST has quietly brought in comparable revenue, even surpassing RM44 billion recently and that’s without the refund drama.
So when comparing GST and SST revenue, it's not just about what’s collected it's about what stays in the treasury.
2. Flexibility Through Zero-Rating
GST allows the government to zero-rate essential goods, minimizing the burden on lower-income households. SST lacks this level of flexibility. Recent taxes on imported fruits, for instance, could have been avoided under GST with zero-rating while still maintaining higher revenue.
3. Policy Inconsistency
The PM says Malaysians earning below RM4,000 monthly can’t afford GST yet SST is being expanded. GST can be fairer if essential goods are zero-rated and B40 support is built in. It’s not the system; it’s how you use it.
4. Public Perception and Value Delivery
Yes, GST faced backlash. But if the government clearly communicates its benefits, zero-rates essentials, and shows how revenue is reinvested into hospitals, aid, and infrastructure, the public might reconsider.
If GST Comes Back, This Time It Must Come With Brains and a Heart
Don’t just rebrand the tax and recycle the flaws. If GST is revived:
- Zero-rate essentials. Rice, milk, sanitary pads, baby food? Leave them alone.
- Raise the GST threshold. Don’t drown micro businesses.
- Expand targeted cash aid. Don’t just tax the poor, cushion them.
- Regulate prices. Stop retailers from misusing tax changes to inflate costs.
- Track and show spending. Let people see how GST funds are actually used.
Final Word: Don’t Make Us Sing Another Tax Song
We’re tired. Tired of jingles, acronyms, and being told to tighten our belts while some tighten their grip on power.
GST. SST. XYZ. None of it matters if the end result is always the same: the people pay, and the elites play.
If you want our support, don’t give us another tax. Give us a reason to believe.
Annan Vaithegi (annanvaithegi@icloud.com) is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
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