KUALA LUMPUR: Malaysia should consider implementing an improved Goods and Services Tax (GST) instead of retaining the Sales and Service Tax (SST) while incorporating elements of GST, says Datuk Seri Wee Jeck Seng (BN-Tanjung Piai).
He questioned why GST elements were needed if the existing SST system was sufficient.
“If GST elements are needed to improve transparency and efficiency, why not consider an improved GST instead?” he asked during the Budget 2027 debate in the Dewan Rakyat on Thursday (Oct 15).
Wee noted that SST collections stood at RM55.9bil in 2025 and were projected to reach RM59.6bil in 2026.
While welcoming the proposed increase in individual tax relief from RM9,000 to RM12,000, he said higher revenue collections and tax relief alone did not show whether the tax system was fair, transparent and efficient.
He also raised concerns over the compliance burden on small and medium enterprises (SMEs), which may need to update accounting systems, verify invoices and maintain additional records when tax rules change.
“Unclear or frequent changes could increase business costs, which might eventually be passed on to consumers.
“There needs to be clearer explanations on tax credits, exemptions, refunds and the compliance requirements businesses would face under the proposed approach,” he said.
Wee said any tax reform should provide sufficient transition time, faster refunds and safeguards for essential goods, as well as targeted assistance for lower-income households.
“A GST system with a low initial rate and appropriate protections could be considered. GST does not automatically mean consumers would pay more, as the impact would depend on the rate, exemptions and implementation,” he said.
Wee also raised concerns over urban poverty, saying income figures alone did not reflect the financial pressures faced by city households, where housing, transport, food and childcare costs were often higher.
He cited the national median formal-sector salary of RM3,027 a month in March 2026, compared with Kuala Lumpur’s median salary of RM4,064 in September 2025 and the capital’s poverty line income of RM3,011 a month.
“Although urban poverty declined from 4.5% in 2022 to 3.7% in 2024, relative poverty remained at 16.7% in 2024, with the relative poverty line at RM3,509 a month,” he said.
Wee said assistance programmes such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) should be reviewed regularly to ensure eligible households were not overlooked as their circumstances and living costs changed.
He also called for longer-term measures to address affordable housing, public transport, wages, childcare and skills development.
