Malaysia to retain SST while adopting GST elements to prevent cascading tax

Malaysia will retain its Sales and Service Tax (SST) system while incorporating specific elements from the Goods and Services Tax (GST) to prevent cascading or double taxation. Deputy Finance Minister Liew Chin Tong announced this in the Dewan Rakyat, stating that the government aims to improve the existing tax framework without increasing the burden on consumers.

Liew explained that the decision to maintain SST is based on its simplicity and long-standing history of over 50 years. He noted that while GST is used in other countries, it requires approximately 480,000 companies to act as collecting agents, whereas SST only requires about 80,000. The government intends to use modern tools like e-invoicing to prevent tax leakage, reducing the need for the complex input-output mechanisms typically required by a GST system.