Malaysia will retain the SST while adopting suitable GST elements to prevent cascading tax effects and reduce the burden on consumers and businesses
KUALA LUMPUR: The proposal to integrate elements of the goods and services tax (GST) with the sales and service tax (SST) aims to ensure no cascading tax effect in the country’s taxation system, said Deputy Finance Minister Liew Chin Tong.
He said the SST would remain the country’s taxation system; however, the government would incorporate suitable features from the GST into the existing system.
“This means our system is the SST system, but we have adopted elements from the GST system to ensure there is no cascading element or no cascading effect in our system,” he said in a reply to a supplementary question in the Dewan Rakyat today.
He was replying to a supplementary question from Datuk Seri Hamzah Zainudin (PN-Larut) about the direction of the country’s taxation system — specifically whether the SST would be retained or combined with elements of the GST.
Liew said the decision to proceed with the SST was made because the system is easier to understand and has a history spanning more than 50 years.
“So, what the government aims to establish is a balance ensuring consumers are not burdened, while businesses are assured that there are no cascading effects,” he said.
On Aug 18, Prime Minister Datuk Seri Anwar Ibrahim said that the government is open to exploring a proposal to combine elements of the GST and SST to ensure a more progressive national taxation system.
