Anwar orders full study of hybrid SST-GST system, report to go to Cabinet

Kuala Lumpur, August 19 - Prime Minister Datuk Seri Anwar Ibrahim has instructed the Finance Ministry to conduct an exhaustive examination of the proposal to introduce a hybrid taxation system that merges the existing Sales and Services Tax (SST) with the Goods and Services Tax (GST), according to government spokesman Datuk Seri Fahmi Fadzil.

Finance Minister II Datuk Seri Amir Hamzah Azizan has been assigned the responsibility of overseeing the study of the hybrid taxation system's suitability. The ministry has been granted ample time to compile a report on the proposal, which will subsequently be presented to the Cabinet for further deliberation. "At present, the proposal is still in its preliminary stages and cannot be decided upon yet, as it necessitates a thorough examination of various aspects," Fahmi informed during a live post-cabinet media briefing.

Fahmi, who serves as the communications minister, emphasized that the Finance Ministry will consider lessons learned from the previous GST implementation and the challenges faced under the current SST system. He added that the timeframe for completing the study is not predetermined and the government has not yet made a decision on the proposed hybrid taxation system.

Anwar had previously indicated that the government was open to evaluating the need to combine the SST and GST to enhance the nation's taxation system, making it more progressive. The GST, a consumption tax applied broadly, was introduced in April 2015 under the then-Najib Razak administration. Following the 2018 general election, the Pakatan Harapan (PH) federal government replaced the GST with the SST in September 2018.