KUALA LUMPUR – The government is willing to examine proposals to incorporate certain elements of the Goods and Services Tax (GST) into the existing Sales and Service Tax (SST) framework as part of efforts to develop a more progressive taxation system, said Prime Minister Datuk Seri Anwar Ibrahim.
Anwar, who is also Finance Minister, said Malaysia would continue to maintain the SST as the country’s primary tax system, while considering specific GST features that are deemed suitable and beneficial, Bernama reported.
“But there is one thing I will not compromise on: I do not want a tax that broadly affects the entire population, which was the fundamental premise of the GST,” he told reporters during the closing session of the Budget 2027 engagement session in Putrajaya today.
He said his main concern with GST was its broad-based nature, as it would require all segments of society, including those who had never previously paid taxes, to contribute.
“When discussing the GST specifically, my concern — which I have voiced repeatedly — is that this is a tax levied on the people.
“Although some argue that this tax is (more) efficient, it is ultimately a tax on the people, meaning those who have never paid taxes before would be required to do so. How can we justify this in the current climate? Given the cost of living, it would become a burden on the rakyat,” he said.
Anwar said any review of the taxation structure must take into account the current economic situation and the impact on Malaysians, particularly those facing financial pressures.
Budget 2027, themed “Malaysia MADANI: Menggapai di Langit, Mengakar di Bumi”, is scheduled to be tabled in Parliament on Oct 9.
Also present at the engagement session were Finance Minister II Datuk Seri Amir Hamzah Azizan, Deputy Finance Minister Liew Chin Tong, Treasury secretary-general Tan Sri Johan Mahmood Merican, Bank Negara Malaysia Governor Datuk Seri Abdul Rasheed Ghaffour, secretaries-general, heads of service, senior government officials, industry and association representatives, non-governmental organisations, as well as economic figures and academics. – August 18, 2026