PUTRAJAYA: Malaysia is open to incorporating certain Goods and Services Tax (GST) elements into the existing Sales and Service Tax (SST) to make the tax system more progressive, says Datuk Seri Anwar Ibrahim.
The Prime Minister said that while SST would remain the basis of the current tax system, certain GST features could be incorporated if they improve the existing system.
“We are open to studying ways to improve the tax system.
“But if we are talking about GST alone, my concern, as I have said repeatedly, is that this means taxing the people,” he told reporters after attending the Budget 2027 engagement session at the Finance Ministry here yesterday.
Budget 2027 is expected to be tabled in Parliament on Oct 9.
GST, a multi-stage consumption tax, was introduced on April 1, 2015, but was abolished and zero-rated on June 1, 2018.
It was replaced by SST on Sept 1, 2018, in line with the manifesto of the then Pakatan Harapan-led administration.
Anwar, who is also Finance Minister, was asked about suggestions to integrate elements of GST and SST to create a more progressive tax system.
Anwar said GST would require those who currently do not pay taxes to contribute, adding that justifying this would be difficult amid current cost-of-living pressures.
“Taxing the people means those who have never paid tax before will have to pay, even if they say it is more efficient.
“How do we respond to that in the current situation, given the cost of living and the burden on the people?” he said.
However, Anwar said he would not compromise on avoiding a broad-based tax that would affect all Malaysians.
“I do not want a broad-based tax imposed on the people, which is the fundamental approach under GST.
“GST is a broad-based tax; we tax everyone. I do not agree with that.”
Anwar reiterated that SST would remain the basis of the country’s tax system, although certain adjustments could be considered.
“The basis remains SST. But if there are certain features that we can accept, then we will accept them,” he said.
Meanwhile, addressing calls to extend the Lembaga Tabung Haji (TH) Royal Commission of Inquiry (RCI) up to 2025, Anwar said that enforcement and investigative bodies are already looking beyond the original time frame.
He said nothing was preventing enforcement agencies from investigating beyond the period the RCI focused on.
“All the actions and studies being undertaken now go beyond the RCI. The RCI serves as the overarching framework.
“There is nothing stopping us from looking into what happened before and after, and this is what the enforcement and investigative agencies are doing,” said Anwar.
The government had previously been urged to extend the scope of the RCI into TH-related issues to cover 2021 to 2026, rather than just from 2014 to 2020.
Umno Supreme Council member Datuk Seri Dr Ahmad Maslan was reported to have claimed that the sale and purchase of TH assets also took place between 2021 and 2026, rather than only during the 2014 to 2020 period.
Several other government backbenchers have also made similar calls in Parliament.
