Cabinet orders full study on proposed GST-SST hybrid

PUTRAJAYA: The Malaysian government has commissioned an extensive study of a proposed hybrid tax system combining the goods and services tax (GST) and the sales and services tax (SST). Finance Minister II Amir Hamzah Azizan has been given the responsibility to conduct the research and present findings to the Cabinet for further deliberation.

According to government spokesman Fahmi Fadzil, Prime Minister Anwar Ibrahim has personally directed the finance minister to undertake the study, which will analyze lessons from the existing GST system and challenges associated with the current SST system. Fahmi emphasized that the finance ministry has been granted ample time to prepare a comprehensive report, as hastiness is not an option.

The study has not been assigned a deadline, and it remains uncertain whether the proposal will be included in the upcoming federal budget. The GST, introduced in April 2015 at a rate of 6%, was subsequently zero-rated in June 2018 and replaced with the SST in September 2018. Anwar has recently expressed openness to exploring a tax structure that integrates features of both the GST and SST to create a more progressive tax system.

Additionally, the Cabinet approved a comprehensive national border management plan for immediate implementation, with the transport and home ministries presenting proposals to enhance security at the country's entry points.