KUALA LUMPUR, Nov 12 – Prime Minister Datuk Seri Anwar Ibrahim says the government’s decision not to bring back the Goods and Services Tax (GST) is based on economic concerns, not political interests.
He said the government wants to avoid placing additional financial pressure on Malaysians, especially low-income households.
Anwar, who is also Finance Minister, explained that GST applies broadly to consumers. Therefore, bringing it back while household incomes remain relatively low could increase the cost of living.
He made the remarks during the Minister’s Question Time session in the Dewan Rakyat on Thursday.
Government open to improving SST
Although the government rejects the return of GST for now, Anwar said it remains open to improving the existing Sales and Services Tax (SST).
He acknowledged concerns from businesses about possible double taxation under the current system.
However, he said the government could address these issues through targeted adjustments without replacing SST with GST.
Anwar stressed that he was not opposed to improving the tax system. Instead, he wanted any changes to support the economy without placing an excessive burden on ordinary people.
GST may only be considered when incomes rise
Anwar said the government could reconsider GST when Malaysians earn higher incomes.
He cited a minimum monthly income of RM4,000 as an example of a level that could make the tax easier for households to manage.
He also noted that current income levels remain relatively low. At the same time, some business groups have resisted the government’s efforts to increase the minimum wage.
The Prime Minister added that several major business representatives had proposed bringing back GST during earlier Budget discussions.
However, he remained concerned that businesses could pass the additional tax costs to consumers through higher prices.
Protecting consumers remains the priority
Anwar explained that GST and SST affect consumers and businesses differently.
GST applies broadly to goods and services consumed by the public. SST, meanwhile, focuses more directly on businesses, although companies may still pass some costs to customers.
He said the government prefers the current approach because it allows businesses to carry more of the direct tax responsibility.
For now, the government plans to retain SST while considering improvements to address industry concerns.
Anwar said the priority remains protecting Malaysians’ purchasing power and ensuring that tax policies support national economic growth.
Source : BERNAMA | Rewritten By Minutesmy
