KUALA LUMPUR: Business groups have urged the government to incorporate key Goods and Services Tax (GST) features into the Sales and Service Tax (SST) without imposing the complexity or heavy consumer burden of a full consumption tax.
They said the refined framework must reduce supply-chain tax cascading, enhance transaction visibility and simplify the recovery of legitimate input tax.
They also called for higher registration thresholds, faster refunds, streamlined compliance requirements and protection for smaller businesses and essential household spending.
Businesses have long called for the GST to be reinstated at a lower introductory rate, with a more efficient tax-recovery and refund system. However, they are now focusing on how the government’s proposed hybrid approach can be made to work, as the SST remains the basis of the tax system.
Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) president Datuk Ng Yih Pyng said the priority should be to make the system easy for businesses to comply with, rather than recreate the administrative burden of the previous GST regime.
“There should be streamlined input-tax claims, risk-based or random audits after claims are made, faster refunds and quarterly filing where appropriate to reduce administrative burdens,” he said in an interview yesterday.
Ng noted that businesses that invested in accounting systems, hardware and staff training during the 2015 GST implementation could leverage some of that infrastructure and expertise.
“However, the systems would still need to be reconfigured and upgraded for GST-style features, requiring clear technical guidelines and sufficient lead time.”
Ng called for a higher registration threshold based on annual taxable turnover so smaller businesses would not face disproportionate compliance costs.
He also suggested simplifying the number of tax-rate structures to minimise classification disputes, while eligible businesses could be given simplified accounting arrangements and longer filing periods where appropriate.
National Chamber of Commerce and Industry of Malaysia (NCCIM) president Norsyahrin Hamidon concurred that the system should make greater use of digital infrastructure already in place.
He said existing e-invoicing data could be used to improve transaction visibility, strengthen compliance and reduce leakages, while avoiding the need for a separate reporting system.
“Integrating the tax framework with e-invoicing could improve transparency and streamline audits without requiring a broad-based consumption tax,” he said.
Norsyahrin also proposed a RM1mil to RM1.5mil annual turnover threshold for mandatory registration, together with simplified accounting and reporting requirements for smaller businesses.
He said compliance should be proportionate to the size of a business, with smaller firms given more support.
“A micro-enterprise cannot be expected to maintain the same internal tax administration infrastructure as a large corporation,” he said.
Norsyahrin also urged the government to protect essential spending by B40 and M40 households from a disproportionate tax burden, while ensuring businesses were not required to pay tax before receiving payment from customers.
He proposed a 30-day automated refund mechanism with interest on late payments, alongside allowing tax credits to be offset against other tax liabilities.
“For a hybrid tax system to succeed, policy predictability, stakeholder engagement and early consultation with business chambers are paramount,” he said.
“The tax system should ultimately serve as an economic enabler rather than being viewed purely as a revenue-generation tool, with reforms phased in gradually and supported by clear guidelines,” he added.
On Tuesday, Prime Minister Datuk Seri Anwar Ibrahim said the government was open to studying whether certain GST features could be incorporated into SST, while stressing that SST would remain the basis of the tax system.
