KUALA LUMPUR: The government will retain the sales and service tax (SST) while adopting selected features of the goods and services tax (GST) to improve the country’s taxation system.
The move is aimed at strengthening revenue collection and making the existing tax framework more efficient without bringing back GST in its previous form.
The government has previously indicated that it was open to studying a system that could incorporate elements of both GST and SST to create a more progressive taxation structure.
However, the administration has stressed that any changes must take into account their impact on businesses and consumers, particularly lower- and middle-income groups.
GST was introduced in Malaysia in April 2015 at a rate of 6% before being zero-rated in June 2018. It was subsequently replaced by SST in September 2018.
The government’s approach is expected to focus on improving the efficiency and administration of the current SST system while incorporating features of GST that could strengthen tax collection.
The move comes amid efforts to improve Malaysia’s fiscal position and ensure a more sustainable revenue base for the government.
-FMT
