KUALA LUMPUR – The government will maintain the current Sales and Services Tax (SST) structure while working towards improvements for a more efficient and effective tax system, Deputy Finance Minister Lim Hui Ying confirmed.
She explained that this decision reflects the government’s intention to preserve a targeted consumption tax, where essential goods and services commonly used by the public remain largely exempt.
“SST is a targeted tax system that has been in place in Malaysia for over 40 years. It is well-known to industries, businesses, and the public,” she said.
“The system also provides faster fiscal gains for the government,” she added during question time in the Dewan Negara.
Lim’s remarks came in response to a supplementary question from Senator Datuk C. Sivaraj regarding whether the government plans to reinstate the Goods and Services Tax (GST) or further enhance the existing SST to ensure the tax system remains resilient.
The Deputy Finance Minister stated that the government has no immediate plans to reintroduce the GST, citing concerns over the low average household incomes, which would make a broader-based tax burdensome for most people.
“The government acknowledges the strengths of the GST. However, as Prime Minister Datuk Seri Anwar Ibrahim has stated, we do not intend to implement GST at this stage,” Lim said.
She added that reintroducing GST would require a preparation period of up to two years to allow businesses to update their systems before the tax could be rolled out.
Lim further explained that the government carefully considered several factors when deciding on the most suitable tax approach to improve Malaysia’s fiscal position, including the overall structure of the current tax system, potential areas for improvement, economic conditions, fiscal needs, and the general standard of living. – December 9, 2025