{
  "id": 1889415,
  "title": "FMM backs integrating GST features in SST to curb cascading taxes",
  "url": "https://urgent.news/2026/08/19/fmm-backs-integrating-gst-features-in-sst-to-curb-cascading-taxes-1889415",
  "topic": "business",
  "section": "Business",
  "published": "2026-08-19T07:34:00.000Z",
  "source": {
    "name": "Free Malaysia Today",
    "slug": "free-malaysia-today",
    "url": "https://www.freemalaysiatoday.com/category/nation/2026/08/19/fmm-backs-integrating-gst-features-in-sst-to-curb-cascading-taxes"
  },
  "original_language": "en",
  "account": "The Federation of Malaysian Manufacturing (FMM) has welcomed the government's willingness to explore incorporating specific Goods and Services Tax (GST) features into the Sales and Service Tax (SST) scheme. FMM President Jacob Lee stated that this could address the issue of cascading taxes without necessitating an immediate reversal of the GST. Lee explained that cascading taxes, where sales tax is levied at each stage of the supply chain, are a fundamental weakness of the SST. He noted that taxes paid on business inputs typically cannot be recovered, thereby becoming embedded in production and distribution costs throughout the supply chain. Lee welcomed the government's proposal as it presents a practical avenue to integrate a crucial GST feature into the SST. The issue of cascading taxes has become more pressing due to the expansion of the SST since March 2024, with the service tax on most taxable services increasing from 6% to 8%, while that for logistics remained at 6%. Recent exemptions, rate reductions, and transitional relief by the Malaysian government have shown that the wider cost impact necessitates further adjustments after implementation. In July 2025, the service tax was extended to additional areas, including rental and leasing, construction, and financial services. Prime Minister Anwar Ibrahim recently indicated that the government was open to studying a system that would merge elements of the GST and SST to establish a more progressive tax structure. Lee suggested a GST-style input tax credit or offset mechanism that would apply to eligible taxes on materials, machinery, logistics, factory rental, construction, and financing. He advocated for the credit, rebating, or refund of eligible upstream taxes on essential goods and exports. Lee also emphasized the need for an automatic and time-bound refund mechanism, supported by Malaysia's e-Invoice system. While FMM maintains that the GST remains its preferred long-term framework, it called for immediate industry engagement if the SST is to continue as the base system.",
  "summary": "Manufacturers' group says GST-style components can help reduce embedded taxes and business costs.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "Free Malaysia Today",
        "title": "FMM backs integrating GST features in SST to curb cascading taxes",
        "url": "https://urgent.news/2026/08/19/fmm-backs-integrating-gst-features-in-sst-to-curb-cascading-taxes",
        "published": "2026-08-19T07:34:00.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}