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

KUALA LUMPUR, Aug 19 — In a move to evaluate the potential introduction of a hybrid taxation system that combines the existing Sales and Services Tax (SST) with the Goods and Services Tax (GST), Prime Minister Datuk Seri Anwar Ibrahim has instructed the Finance Ministry to conduct an exhaustive study on the proposal. Fahmi Fadzil, the government spokesman, disclosed that Finance Minister II, Datuk Seri Amir Hamzah Azizan, has been assigned the responsibility of overseeing this assessment process.

The ministry has been allotted sufficient time to prepare a comprehensive report on the hybrid taxation system's viability, which will subsequently be presented to the Cabinet for further deliberation and decision-making. At present, the proposal remains in its initial stages, and a conclusive decision has yet to be reached, as it necessitates detailed examination of various considerations.

These considerations encompass insights derived from the previous GST implementation and the challenges encountered under the current SST system. The Finance Ministry will deliberate on these matters before presenting a recommendation at the Cabinet level. Fahmi emphasized that there is no predetermined timeframe for the completion of the study.

The government has not yet reached a verdict on the proposed hybrid taxation system. Earlier, Anwar indicated that the government is open to exploring the feasibility of merging the SST and the GST to enhance the country's taxation framework, aiming for a more equitable distribution of tax burdens. The GST, a broad-based consumption tax, was first implemented in April 2015 at a rate of 6% under the previous administration led by Datuk Seri Najib Razak.

Following the 2018 general election, the Pakatan Harapan (PH) coalition government substituted the GST with the SST in September 2018.