Malaysia’s government announced it will study combining features of the Goods and Services Tax (GST) and Sales and Services Tax (SST) to create a more progressive tax system. Prime Minister Datuk Seri Anwar Ibrahim said the SST will remain the basis of the country’s tax system but the government is open to adopting certain GST elements if they improve tax efficiency and revenue collection [1, 2, 3, 4, 5, 6, 7].
Anwar warned against reinstating GST alone, which he said would broadly tax all Malaysians, including those who have never paid taxes before. “If we are talking about GST alone, my concern, as I have said repeatedly, is that it would mean taxing the people,” he said [2]. He added, “I do not want a tax imposed broadly on the people, as is the basic approach under GST” and highlighted the cost-of-living pressures facing citizens [3, 4, 5].
Malaysia first implemented GST in April 2015 at a 6% rate before it was abolished and zero-rated in June 2018. SST replaced GST starting September 2018 [3, 5]. Experts have noted that adopting GST features like input tax credit could reduce tax cascading problems under SST [5].
The Ministry of Finance has been given time to thoroughly study the proposal before submitting recommendations to Cabinet. Minister Datuk Seri Fahmi Fadzil said, “This is still at an early stage… it involves lessons learned from GST as well as issues under the current SST system” [6].
Malaysia’s Budget 2027 is scheduled to be tabled in Parliament on October 9, 2026, which could provide a platform for official decisions on tax changes [4].
