THE government will maintain the existing Sales and Services Tax (SST) regime, which has been in place for over four decades, citing its familiarity and quicker fiscal returns compared to reintroducing the Goods and Services Tax (GST), the Ministry of Finance (MOF) said.
“The SST is a tax system already understood by the industry, traders and the public, and therefore should be continued,” the MOF said in a written parliamentary reply published on the Dewan Rakyat portal on Wednesday.
The statement was in response to a question from Datuk Seri Ismail Sabri Yaakob (BN–Bera), who had asked about the comparative advantages of SST over GST.
The ministry acknowledged that both systems have their respective strengths and weaknesses. “Under GST, consumption tax is imposed at multiple stages but includes an input tax credit mechanism,” it explained.
“In contrast, SST imposes consumption tax at a single stage without an input tax credit mechanism. However, SST allows for certain exemptions, making it possible to implement the system in a more targeted manner.”
The ministry further noted that expanding the scope of SST is expected to generate an additional RM10 billion annually beginning in 2026.
Reintroducing GST, meanwhile, would require significant lead time. “It would take up to two years of preparation to allow companies to upgrade and adapt their systems for GST implementation,” the statement added.
As such, the government considers SST not only more efficient in the short term but also more practical under current fiscal circumstances. - August 14, 2025
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