The Malaysian government is focusing on the Sales and Service Tax (SST) rather than reintroducing the Goods and Services Tax (GST) to stabilize the economy and meet fiscal deficit targets by 2028, according to the Finance Minister. He emphasized the need to balance economic growth with societal well-being, stating that while GST is a stronger tax system, it could negatively impact the economy compared to a more progressive SST. The government plans to expand SST tax relief to boost revenue without adversely affecting economic conditions, particularly in sectors like logistics.
Malaysian Government prioritizing SST over the reintroduction of GST
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Author: Ivana Picajkić
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Fiscal subject related
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432
Content accuracy validation date:
28.11.2024
Content accuracy validation time:
08:03h
The Malaysian government is prioritizing the Sales and Service Tax (SST) over the reintroduction of the Goods and Services Tax (GST) to stabilize the economy and achieve fiscal deficit targets by 2028, according to the Finance Minister. He emphasized that implementing GST would take 14 to 18 months, delaying additional revenue during that period, which is not ideal for immediate economic needs.
The Minister highlighted the importance of balancing economic growth with societal well-being. Although GST is considered a stronger tax system, he noted that its implementation could have negative effects compared to a more progressive SST approach. The government aims to expand SST tax relief to increase revenue without distorting economic impacts, especially in sectors like logistics, where tax relief measures are in place to mitigate inflation.
The Minister reaffirmed the commitment to achieving fiscal responsibility goals by 2028 while maintaining practical solutions for current economic challenges. Overall, the focus remains on extending SST rather than introducing GST at this time.
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