Anwar rules out full GST return, citing cost-of-living concerns

Prime Minister Anwar Ibrahim has dismissed the idea of fully adopting the Goods and Services Tax (GST) as Malaysia's main tax source, citing concerns about its impact on low-income populations. Speaking to local media, Anwar highlighted the government's commitment to social equity and the need for tax reforms that do not disproportionately burden the poor.

While acknowledging potential adjustments to the Sales and Services Tax (SST) or specific GST components, Anwar maintained that the principle of not increasing taxes for the very poor rules out a full GST implementation. The Prime Minister's remarks come as Malaysia considers a hybrid taxation system, combining elements of the current SST with GST to create a more efficient and compassionate revenue stream.

Finance Minister Amir Hamzah Azizan is leading the feasibility study for this hybrid model. The debate over Malaysia's consumption tax has persisted for over a decade, with the GST first introduced at a 6 percent rate in April 2015 during the Najib Razak administration. Following the 2018 general election, Pakatan Harapan abolished the GST and reverted to the SST model in September of that year. The reintroduction of the GST is being considered to expand the tax base and address fiscal gaps.