Deputy Finance Minister Lim Hui Ying pointed out that the government has decided to maintain the existing Sales and Services Tax (SST) structure, while making improvements to ensure the tax system is more effective.
She noted that this is the government's initiative to maintain a targeted tax regime, whereby most basic goods and services commonly used by the people are not taxed.
She said today (9th) during the Q&A session in the Senate in response to an additional question from Senator Datuk Sivarraajh: "The sales tax is a more targeted taxation system, has been used in Malaysia for over 40 years, and is a system that is familiar to industries, businesses, and the people."
"The implementation of the sales tax also brings a quicker fiscal impact for the government."
Lim Hui Ying pointed out that the government currently has no intention of implementing the Goods and Services Tax (GST), as the general income level remains low and it would be difficult for the public to bear the broader taxation impact of the GST.
"The government is aware of the advantages of the GST system, but as previously stated by Prime Minister Dato' Seri Anwar, the government has no intention of implementing the GST for the time being."
"Reintroducing the GST would require a much longer preparation period, possibly as long as two years, for businesses to update their systems before implementation."
Lim Hui Ying mentioned that, before deciding on the most suitable form of tax regime, the government has considered all aspects in order to consolidate the country’s current fiscal position.
"The government has considered the overall structure of the national tax system, potential areas for improvement, the current economic situation, government revenue needs, as well as the overall standard of living of the people."