Cabinet orders full study on proposed GST-SST hybrid

The finance ministry has been directed to conduct a comprehensive study on the proposed integration of the goods and services tax (GST) and the sales and services tax (SST) before the matter is revisited by the Cabinet. Government spokesman Fahmi Fadzil confirmed that Prime Minister Anwar Ibrahim has specifically tasked finance minister II Amir Hamzah Azizan with undertaking the study.

The finance ministry has been given ample time to prepare a report and present it to the Cabinet for further deliberation, as the proposal is not something that can be hastily executed.

The study will delve into the lessons learned from the previous GST system and the challenges faced by the current SST system. Fahmi Fadzil did not set a deadline for the study, emphasizing that it is an early-stage project. It remains uncertain whether the proposal will be included in the upcoming federal budget.

The GST, a consumption tax levied at multiple stages of the supply chain, was introduced in April 2015 at a rate of 6% and later replaced by the SST in September 2018 after being zero-rated in June 2018. However, Anwar Ibrahim has indicated that the government is open to exploring a system that combines aspects of both GST and SST to create a more progressive tax structure.

In addition to the GST-SST study, the Cabinet has approved a comprehensive national border management plan for immediate implementation. The transport and home ministries have submitted several proposals to bolster security at the country's entry points, which will be put into action starting today. The home ministry has provided further details on the plan.