MALAYSIANS will not face a return of the Goods and Services Tax (GST) while household incomes remain insufficient and the cost of living continues to be a burden, Finance Minister II Datuk Seri Amir Hamzah Azizan said.
He said the government had no immediate plans to reinstate GST and would instead improve the Sales and Service Tax (SST), balancing household affordability, business compliance costs and the need to strengthen national revenue.
Amir said GST tended to disproportionately affect lower-income households because they spent a larger share of their earnings on goods and services.
"SST, on the other hand, allows for a more progressive and targeted approach, whereby the government can select the goods and services to be taxed," he said during the winding-up debate on the Supply Bill 2027 at the policy stage in the Dewan Rakyat on Thursday.
He acknowledged that businesses could pass some of the SST burden to consumers through higher prices, but said the government could regulate its scope based on the public's ability to pay.
On compliance costs, he said nearly 700,000 businesses, representing 90 per cent of registered businesses, were registered under GST in 2018, compared with about 130,000 under SST in 2026.
He said the wider coverage under GST meant more companies had to manage tax reporting requirements and bear the associated compliance costs.
Citing Prime Minister Datuk Seri Anwar Ibrahim's position, Amir reiterated that GST reinstatement would remain off the table until incomes reached reasonable levels and living costs became less burdensome.
He said SST improvements had nevertheless strengthened revenue collection, with receipts increasing from RM55.9 billion in 2025 to an estimated RM67 billion this year and projected to reach RM73.3 billion in 2027.
The projected increase represents an additional RM17.4 billion over two years, he said.
Amir added that SST collections had reached three per cent of gross domestic product, matching the level achieved by GST in 2017.
He argued that replacing SST with GST would not necessarily generate additional revenue but could shift more of the tax burden onto consumers. - October 30, 2026
