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KUALA LUMPUR – The Government will continue with the Sales and Service Tax (SST) while adopting some of the features of the Goods and Services Tax (GST) system to strengthen the country’s taxation system.
Deputy Finance Minister Liew Chin Tong said Prime Minister Datuk Seri Anwar Ibrahim had expressed his willingness to adopt some of these features during the Budget 2027 engagement session on Aug 18.
According to him, the elements being considered would also help prevent a cascading or double taxation effect on the people.
“The Government will incorporate features that work well in the GST system into the existing system.
“The existing system is SST, but there are indeed GST elements that can be incorporated to ensure there is no cascading or double taxation effect in the tax system,” he said in the Dewan Rakyat here on Wednesday.
He was responding to a supplementary question from Datuk Seri Hamzah Zainudin (PN-Larut) on the direction of the country’s taxation system.
Elaborating, Chin Tong said one reason the Government wanted to continue with the SST system was that it was easier to understand and had been in place for more than 50 years.
However, he said the proposal to reintroduce positive elements of the GST system was based on how it had been implemented in other countries.
“If the GST system were implemented now, it would involve at least 480,000 businesses paying taxes to the Government, whereas SST only involves around 80,000 businesses.
“Certainly, SST can ease the burden on most small businesses by avoiding the additional burden of GST, as well as the need to manage refunds and other related issues,” he said.
