Govt to incorporate GST elements into SST to prevent double taxation
KUALA LUMPUR: The government will incorporate elements of the Goods and Services Tax (GST) into the existing Sales and Service Tax (SST) system to prevent cascading and double taxation, the Dewan Rakyat heard.
Deputy Finance Minister Liew Chin Tong outlined plans to integrate elements of the Goods and Services Tax (GST) into Malaysia's existing Sales and Service Tax (SST) system during a parliamentary hearing. Liew emphasized that the government would maintain the SST system while adopting GST elements to prevent double taxation and cascading effects.
He stated that the SST's long-standing familiarity and ease of understanding would be preserved, while GST features aiming to eliminate double taxation would be incorporated. Liew highlighted that GST's implementation in other countries, particularly France in 1954, necessitated input and output mechanisms due to the lack of e-invoicing at that time.
However, Malaysia's adoption of e-invoicing negates the need for such mechanisms, making GST potentially more efficient. Liew clarified that GST's requirement for 480,000 tax collectors compared to SST's 80,000 companies makes the two systems fundamentally different. By combining GST's advantages with SST's simplicity, Liew aimed to create a tax system that does not burden the majority of people while still enabling businesses to operate smoothly without the cascading impact of taxes.
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